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UNIVERSITY    OF  CALIFORNIA 

Xeceired 
Accessions  No.  2  ^«T7/        Shelf  No. 


OS- 


FISCAL  HISTORY  OF  TEXAS. 


EMBRACING  AN  ACCOUNT  OF  ITS 


REVENUES,  DEBTS,  AND  CURRENCY 


THE  COMMENCEMENT  OF  THE  REVOLUTION  IN  1834  TO  1851-52. 


WITH 


REMARKS  ON  AMERICAN  DEBTS. 


BY 


WILLIAM   M.  GOUGE, 

AUTHOR  OF  "A  SHORT  HISTORY  OF  PAPER-MONEY  AND  BANKING 
IN  THE  UNITED  STATES." 


PHILADELPHIA: 
LIPPINCOTT,    GRAMBO,    AND    CO. 

1852. 


V 

"      *>     V  **)  "v%      "i 

•  %  ^  .  .         *>  ^ 


Entered  according  to  the  Act  of  Congress,  in  the  year  1852,  by 

' 


- 

LIPPINCOTT,  'GRAMBO,  AND  CO., 


in  the  Office  of  the  Clerk  of  the  District  Court  of  the  United  States  in  and  for 
the  Eastern  District  of  Pennsylvania. 


PHILADELPHIA: 
T.  K.  AND  P.  G.  COLLINS,  PRINTERS. 


PREFACE. 


IN  1833,  the  author  of  this  work  published  "  A  Short  History  of 
Paper-Money  and  Banking  in  the  United  States,"  the  reception  of 
which  by  the  public  was  far  more  favorable  than  he  anticipated. 
He  has  been  for  some  time  collecting  materials  for  a  continuation 
of  that  history ;  and  a  visit  to  the  capital  of  Texas,  in  the  early 
part  of  1852,  afforded  him  as  good  an  opportunity  as  he  could  de 
sire  of  making  himself  acquainted  with  whatever  was  most  import 
ant  in  the  currency  concerns  of  that  distant  region.  A  rise  in  the 
waters  of  the  rivers,  which  put  an  end  to  ordinary  travelling,  left 
him  at  leisure  to  extend  his  inquiries  further  than  he  originally 
intended.  As  he  proceeded,  he  found  the  materials  far  more  im 
portant  than  he  had  supposed  them  to  be,  and  the  result  is  the 
volume  now  presented  to  the  public.  It  embraces  much  that  could 
not  with  propriety  be  introduced  into  a  continuation  of  "A  His 
tory  of  Paper-Money  and  Banking  in  the  United  States,"  as  most 
of  the  important  events  it  records  occurred  before  Texas  became 
a  member  of  the  Union. 

In  the  conduct  of  this  work,  the  want  of  a  good  general  history 
of  Texas  has  been  much  felt — that  by  Kennedy  extending  no  fur 
ther  than  to  1839-1840.  The  general  historian  ought  to  have 
prepared  the  way  for  the  inquirer  into  the  fiscal  concerns  of  the 
Republic;  but  he  has  had  to  prepare  the  way  for  the  general  his 
torian. 

Other  difficulties  have  been  encountered  through  the  loss,  by 
fire,  of  part  of  the  records  of  the  Republic.  But  free  access  to 
all  that  remained  was  courteously  granted  by  the  Texan  authori 
ties,  and  whenever  the  record  was  deficient,  they  kindly  supplied 
what  was  wanted  by  oral  information.  Especially  are  the  thanks 
of  the  author  due  to  P.  Hansboro'  Bell,  the  <v  -Governor,  James 


IV  PREFACE. 

B.  Shaw,  Comptroller,  John  M.  Swisher,  Auditor,  James  H.  Ray 
mond,  Treasurer;  to  W.  D.  Miller  the  former,  and  Thomas  S. 
Duvall  the  present,  Secretary  of  State;  and  also  to  Mr.  Brewster, 
the  editor  of  the  Texas  State  Gazette,  and  Mr.  De  Cordova,  the 
editor  of  the  South- Western  American. 

The  extracts,  when  of  any  length,  are  given  in  distinct  type. 
This  gives  the  volume  all  the  advantages  of  a  documentary  history, 
and  will  enable  the  reader  to  distinguish  at  a  glance  what  is  said 
by  the  author  from  what  is  said  by  others.  It  will  also  afford 
those  who  have  not  leisure  or  inclination  to  read  the  whole  work, 
facilities  in  selecting  the  passages  in  which  they  may  be  most  inte 
rested. 

If  the  book  is  not  as  amusing  as  the  last  new  novel,  the  writer 
cannot  help  it.  He  has  done  the  best  he  could,  in  the  short  time 
allowed  him,  with  the  dry  and  stubborn  materials  he  had  to  handle. 
He  comforts  himself  with  the  hope  that,  as  he  does  not  write  for 
boarding-school  misses,  such  dryness  as  necessarily  arises  from  the 
nature  of  the  subject  will  be  pardoned.  Some  of  the  details  may 
be  interesting  to  few  but  citizens  of  Texas,  and  creditors  of  Texas; 
but  the  principles  involved  are  highly  important,  not  only  to  those 
whose  political  position  requires  them  to  study  finance  as  a  science, 
but  to  all  who  are  in  any  way  interested  in  the  preservation  of  the 
public  faith  when  pledged  for  the  payment  of  public  debts. 

November,  1852. 


INTRODUCTION 


IT  may  appear  to  some  quite  unnecessary  to  devote  a  whole 
volume  to  the  fiscal  concerns  of  a  people,  who,  at  the  beginning, 
numbered  but  twenty  thousand;  who,  when  they  were  annexed  to 
the  United  States,  did  not  exceed  one  hundred  thousand ;  and  who, 
according  to  the  census  returns  of  1850,  were  then  less  than  two 
hundred  thousand.  But  history  is  of  importance  only  as  it  illus 
trates  principles;  and  principles  may  be  as  strikingly  illustrated 
in  the  small  communities  of  Rhode  Island,  Delaware,  or  Texas,  as 
in  the  larger  ones  of  New  York,  Massachusetts,  or  Virginia. 

The  founders  of  the  Republic  of  Texas  were  quite  as  bold  and 
quite  as  brave  as  the  founders  of  ancient  Rome;  and,  in  all  pro 
bability,  quite  as  good.  At  all  events,  they  did  not  invite  their 
neighbors  of  Arkansas  and  Louisiana  to  a  camp-meeting,  and  then 
steal  their  wives  and  daughters  from  them. 

In  the  short  period  of  seven  months,  they  achieved  the  independ 
ence  of  a  country  larger  than  Great  Britain  and  Ireland,  and 
for  ten  years,  without  direct  aid  from  any  foreign  government, 
they  sustained  this  independence,  in  defiance  of  all  the  attempts 
which  a  nation  of  ten  millions  made  to  reduce  them  to  subjection. 

The  history  of  such  a  people  cannot  be  without  interest.  As 
we  proceed,  it  will  be  found  that  all  the  fiscal  faults  which  the  great 
nations  of  Europe  and  America  have  committed  on  a  large  scale, 
the  Texans  have  committed  on  a  small. 

Owing  to  the  connections  which  this  people  have  since  entered 
into  with  the  United  States,  interesting  questions  arise  to  the  publi 
cist.  Texas  is  the  first  region  that  has  been  annexed  to  our  Union, 
by  the  free  consent  of  both  parties,  without  purchase  and  without 
conquest ;  but  it  will  not  probably  be  the  last.  It  is  important 
that  we  should  know  what  liabilities,  in  regard  to  the  public  debts 


VI  INTRODUCTION. 

of  communities  so  annexed,  are  thus  brought  on  the.  United 
States. 

But  in  points  even  more  important  than  these  does  the  fiscal 
history  of  Texas  command  attention. 

The  paper-money  disease  is  hereditary  with  us  Americans.  If 
it  is  subdued  in  one  form,  it  breaks  out  in  another.  To  the  old 
provincial  paper-money,  succeeded  State  paper-money  and  conti 
nental  money.  Then,  brought  almost  to  death's  door  by  the  vio 
lence  of  our  complaint,  we  searched  for  a  remedy,  and  thought  we 
had  found  one  in  that  provision  of  the  U.  S.  Constitution  which 
declares  that  "no  State  shall  emit  bills  of  credit."  The  disease, 
however,  soon  made  its  appearance  with  new  vigor;  the  States 
evading  the  principles  of  the  Constitution  by  establishing  corpora 
tions  to  do  that  which  they  have  not  the  power  to  do  themselves. 

Do  the  banks  suspend  specie  payments?  This  only  increases 
the  amount  of  paper  issues,  and  the  number  of  paper  issuers.  The 
corporations  of  cities  and  towns,  turnpike  companies,  bridge  com 
panies,  railroad  companies,  and  individuals  in  all  the  private  walks 
of  life  immediately  commence  the  issue  of  notes  for  dollars  and  the 
fractional  parts  of  dollars.  A  new  term  is  not  then  introduced 
into  the  language,  but  a  new  application  is  made  of  an  old  term, 
and  "shin-plasters"  mean  in  America  what  "shin-plasters"  mean 
nowhere  else. 

Does  the  United  States  Government  want  money?  Instead  of 
borrowing  gold  and  silver,  it  borrows  paper  from  the  banks,  or 
resorts  to  the  issue  of  treasury  notes,  and  makes  them  receivable 
for  duties.  In  the  only  very  important  war  we  have  had  since 
the  War  of  Independence,  it  kept  on  with  the  issue  of  these  notes 
till  they  were  depreciated  far  below  par;  and  the  contrivances 
resorted  to  in  the  times  of  Van  Buren  and  Polk  to  throw  into 
circulation  treasury  notes  bearing  no  interest,  or  only  nominal 
interest,  show  that  even  those  statesmen  from  whose  professed 
principles  better  things  might  be  looked  for  are  themselves  deeply 
infected  with  the  hereditary  disease  of  the  nation.  If  such  slight 
fiscal  embarrassments  as  were  felt  in  the  times  of  Polk  and  Van 
Buren  could  induce  them  to  sanction  or  connive  at  the  issue  of 
treasury  notes  bearing  no  interest,  or  only  nominal  interest,  there 
is  every  reason  to  believe  that,  in  a  period  of  real  exigency,  they 
would  have  resorted  to  the  issue  of  treasury  notes  of  such  small 


INTRODUCTION.  Vll 

denominations  as  would  have  driven  gold  and  silver  out  of  circu 
lation. 

Do  we  wish  to  get  rid  of  a  Bank  of  the  United  States  ?  "We 
proceed  in  such  a  way  that,  in  putting  down  one  bank,  we  put  up 
five  hundred. 

Does  the  deep  experience  of  the  evils  we  have  suffered  under 
both  a  national  bank  and  a  league  of  "pet  banks"  incline  us  to 
separate  bank  and  State  ?  Our  sub-treasury  system  is  so  imper 
fectly  framed  that  disbursing  officers  must,  of  necessity,  use  banks 
as  depositories  ;  and  then,  though  the  revenues  of  government  are 
collected  in  gold  and  silver,  they  are  paid  out  in  paper. 

Is  one  form  of  paper  banking  found  not  to  answer?  We  then 
resort  to  another.  To  acts  incorporating  each  bank  separately, 
succeed  general  banking  laws,  by  which  they  are  incorporated 
altogether. 

Does  a  "  safety  fund"  afford  evidence,  by  its  own  action,  that 
there  is  no  safety  in  it?  Then  we  resort  to  "free  banking,"  and 
require,  from  the  issuers  of  notes,  deposits  of  mortgages  and  stocks 
by  way  of  security.  This  system  does  very  well  in  fair  weather, 
and  we  inquire  no  further. 

Do  the  States  want  money  ?  They  perhaps,  like  Pennsylvania, 
resort  to  a  pitiful  evasion  of  the  organic  law  of  the  Union,  and 
issue  "  relief  notes ;"  or  it  may  be,  like  Indiana,  more  boldly  vio 
late  the  Federal  Constitution,  by  emitting  small  bills  of  credit,  and 
calling  them  treasury  notes. 

Do  the  banks  throughout  the  country  suspend  specie  payments  ? 
Then  we  have  a  good  opportunity  of  getting  rid  of  the  whole  con 
cern.  But  we  embrace  it  not.  We  re-establish  the  system  by  co 
ercing  a  return  to  specie  payments — a  measure  which  inflicts  twice 
as  much  evil  on  the  community  as  would  be  produced  by  gradually 
winding  up  the  suspended  institution.  We  will  do  anything,  we 
will  suffer  anything,  rather  than  give  up  our  paper-money. 

Occasionally,  in  particular  parts  of  the  country,  suffering  in 
tensely  under  our  hereditary  malady,  we  resort  to  severe  legal  and 
even  constitutional  provisions  to  prevent  further  issues  of  paper. 
But  the  power  that  makes  State  constitutions  and  State  laws  can 
also  unmake  them ;  and  we  hardly  become  convalescent  before  we 
relapse  into  our  old  disease. 

Texas,  though  it,  from  1835  to  1845,  formed  no  part  of  the 


Vlll  INTRODUCTION. 

American  Union,  was  yet  an  American  State.  It  was  a  State 
without  the  Union.  The  people  were  Americans  by  birth,  thought, 
habits,  feeling.  Their  political  institutions  distinguished  them  in 
one  particular  only  from  the  States  within  the  Union.  They  had 
within  them  that  disease  which  taints  all  American  blood,  the 
paper-money  disease,  inherited  from  their  ancestors.  This,  "  the 
original  sin"  of  Americans,  had  never  been  washed  away  by  any 
baptism  of  sufferings.  It  is  interesting  to  trace  the  manner  in 
which  this  hereditary  corruption  displayed  itself  under  the  peculiar 
circumstances  in  which  the  Texans  were  placed,  free  from  the  re 
straints  imposed  by  the  United  States  Constitution.  In  this  point 
of  view,  the  history  of  currency  and  finance  in  Texas  becomes  more 
important  than  it  would  be  if  it  were  simply  the  history  of  currency 
and  finance  in  a  small  community  of  20,000  to  100,000  persons, 
distinguished  in  no  way  from  the  communities  surrounding  it. 

Closely  connected  with  the  subject  of  paper-money,  is  that  of 
public  debt.  Where  there  is  the  first,  there  will  be  the  last.  And 
it  is  no  small  objection  to  paper-money  that  it,  in  some  instances, 
involves  governments  in  debt  that  would  otherwise  be  exempt  from 
such  burdens  ;  and  that  it,  in  other  instances,  where  public  debts 
would  be  small,  increases  them  to  such  an  amount  as  to  make  them 
intolerable. 

Our  own  views  on  this  subject  are,  in  the  main,  as  follows : — 

1.  A  public  debt  is  a  public  evil. 

2.  Nevertheless,  it  is  sometimes  necessary  to  incur  public  debts 
in  order  to  secure  the  liberty  and  independence  of  a  nation.     In 
such  cases,  we  submit  to  one  evil  in  order  to  avoid  a  greater. 

3.  In  other  cases,  it  seems  expedient  to  incur  public  debts,  even 
when  they  are  not  absolutely  necessary.     The  benefits  resulting 
from  them  may  more  than  compensate  for  the  evils. 

4.  Great  caution  should  be  had  in  incurring  public  debts,  because 
there  is  not  naturally  the  same  checks  on  them  as  on  private  debts. 
The  private  man  who  incurs  a  debt  has  to  depend  on  himself  alone 
for  the  payment  of  both  principal  and  interest.     The  public  men 
who  create  debts  throw  all  the  burden  of  paying  them  on  others. 
They  may  incur  these  debts  for  their  own  special  benefit,  and  the 
community  will  have  to  pay  them.     Even  when  the  selfish  interests 
of  the  lawgivers  are  not  advanced  in  this  way,  great  caution  ought 
to  be  had  in  incurring  public  debts,  as  too  great  facility  in  borrow- 


INTRODUCTION.  ix 

ing  always  leads  to  profusion  in  expenses.  In  addition  to  this, 
there  is  an  important  check  on  private  debts  which  does  not  apply 
to  public  debts.  A  private  man,  when  he  incurs  a  debt,  knows  that 
he  must  not  only  pay  the  interest  punctually,  but  that  he  will 
sooner  or  later  be  called  on  for  the  principal.  But  if  a  government 
only  pays  the  interest  punctually,  the  principal  may  remain  unpaid 
forever. 

5.  Nothing  but  violations  of  constitution,  and  violations  of  law, 
or  gross  frauds  in  the  negotiation  of  public  debts,  will  justify  a 
repudiation  of  them.     No  matter  how  unwise  it  may  have  been  to 
borrow  it,  and  no  matter  how  foolishly  it  may  have  been  expended, 
if  the  money  has  been  borrowed  according  to  law  and  constitution, 
it  ought  to  be  paid. 

6.  There  is  no  force  in  the  observation  that  one  generation  is  not 
bound  by  the  debts  of  another.     The  property  created  by  the 
industry  of  one  generation  passes  to  that  which  succeeds  it,  and 
so  on  in  perpetuity.     The  State  never  dies.     The  individuals  that 
compose  the  State  are  always  changing,  just  as  the  atoms  of  the 
human  body  are  changing;  and  it  is  impossible  to  mark  the  succes 
sion  of  individuals  that  compose  a  State  in  such  a  way  as  to  say 
that  one  class  of  them  shall  not  be  responsible  for  the  debts  incurred 
in  the  times  of  their  predecessors.     The  benefits  that  may  arise 
from  incurring  a  public  debt  may  extend  through  many  genera 
tions.     If  the  wars  of  William  Pitt  were  really  necessary  to  pre 
serve  the  independence  of  Great  Britain,  it  is  just  and  right  for  the 
English  people  of  the  present  day  to  pay.  the  interest  on  the  debt 
incurred  in  the  prosecution  of  these  wars.     The  Americans  of  the 
present  generation  have  done  no  more  than  justice  in  paying  off 
the  debt  of  the  Revolution,  for  they  are  in  the  full  enjoyment  of 
the  blessings  of  the  Revolution. 

7.  After  a  government  has  once  made  a  regular  audit  of  a  claim 
against'  it,  and  issued  a  negotiable  acknowledgment  of  the  same,  it 
has  no  right  in  after  years  to  reopen  that  audit.     A  negotiable 
evidence  of  public  debt,  no  matter  what  its  form  may  be,  transfers 
all  the  rights  of  the  original  holder  to  the  final  possessor.     This 
point  was  very  clearly  set  forth  by  Mr.  Sedgwick,  of  Massachu 
setts,  in  the  debate  in  Congress,  in  February,  1790,  on  the  fund 
ing  of  the  revolutionary  debt. 

"  Whenever  a  voluntary  engagement  is  made  for  a  valuable  considera- 


X  INTRODUCTION. 

tion  for  property  advanced,  or  services  rendered,  and  the  terms  of  the  con 
tract  are  understood,  if  no  fraud  or  imposition  is  practised,  the  party  en 
gaging  is  bound  to  the  performance,  according  to  the  literal  meaning  of 
the  words  in  which  it  is  expressed.  Such  contracts,  whether  of  a  govern 
ment  or  an  individual,  may  either  be  transferable  or  not  transferable.  The 
latter  species  of  contract  receives  an  additional  value  from  its  capacity  of 
being  transferred,  if  the  circumstances  of  the  possessor  should  render  the 
sale  of  it  either  necessary  or  convenient  to  him.  To  render  the  transferable 
quality  of  such  evidences  of  contract  in  any  degree  advantageous  to  the 
possessor,  it  is  necessary  to  consider,  in  case  of  sale,  the  alienee  possessed 
of  all  the  property  of  the  original  holder;  and,  indeed,  it  is  highly  absurd, 
and  even  contradictory,  to  say,  that  such  evidences  of  debt  are  transferable, 
and  at  the  same  time  to  say  that  there  is  in  them  a  kind  of  property  which 
the  holder  could  not  convey  by  bona  fide  contract. 

(l  This  is  the  construction  which  has  invariably  been  given  to  these  con 
tracts,  whether  formed  by  government  or  by  individuals." 

These  are  the  views  which  we,  and  the  great  majority  of  our 
readers,  have  held  from  our  youth  upwards.  But,  in  opposition  to 
these  sentiments,  Texas  maintains,  through  her  authorities,  that  a 
State,  in  the  times  of  her  prosperity,  is  not  bound  to  fulfil  the 
engagements  she  entered  into  in  the  times  of  her  adversity,  but  is 
at  liberty  to  modify  them  to  such  extent  as  to  herself  may  seem 
equitable. 

These  views  are  very  distinctly  set  forth  in  a  message  which 
Governor  Bell  sent  to  the  Legislature,  on  the  12th  of  November, 
1851.* 

"  The  Republic  of  Texas  having  executed  her  bonds  and  other  evidences 
of  debt  in  an  exceedingly  dark  and  gloomy  period  of  her  history,  it  became 
necessary  to  issue  them  for  nominal  amounts,  bearing  no  sort  of  proportion 
to  the  amount  actually  received,  and  to  pledge  her  resources,  arising  mainly 
at  that  time  from  her  revenue,  for  their  redemption.  These  securities, 
generally  speaking,  were  concentrated  at  very  low  rates  in  the  hands  of 
moneyed  speculators,  who  had  contributed  nothing  to  the  achievement  of 
her  independence,  or  to  the  relief  of  her  actual  necessities  in  the  adminis 
tration  of  the  government  at  the  time  they  were  issued.  This  considera 
tion,  well  understood  and  appreciated,  induced  an  inquiry  in  respect  to  the 
mode  of  redeeming  these  securities,  as  no  one  could  entertain  the  opinion, 
for  a  moment,  that  the  government  was  under  any  obligation,  either  in 
justice  or  morality,  to  redeem  them  by  paying  the  amount  expressed  on  their 
face;  and  that  inquiry  resulted  in  the  passage  of  the  act  of  the  State 
Legislature  of  March  4JO,  1848,  'to  provide  for  ascertaining  the  debt  of 

*  The  reader  musfhot  hold  Governor  Bell  personally  responsible  for  these  senti 
ments,  but  regard  him  as  the  exponent  of  a  community  in  which  these  principles 
have  .so  long  been  taken  for  granted,  that  it  is  supposed  to  be  unreasonable  to  doubt 
their  correctness. 


INTRODUCTION.  XI 

the  late  Republic  of  Texas/  which  act  required  the  auditor  and  comptroller 
of  the  State  to  reduce  all  claims  presented  for  liquidation  to  the  actual  par 
value  which  was  realized  by  the  Republic  at  the  time  of  their  issue.  The 
evident  meaning  and  contemplation  of  that  act  was,  that  the  holders  should 
be  paid  in  accordance  with  that  amount  thus  ascertained  by  the  auditorial 
board,  subject  to  the  revision  of  the  Legislature;  and  the  amounts  so  ascer 
tained  were  considered  all  that  was  actually  due  from  the  State  to  her 
several  creditors. 

"  That  the  Legislature  had  the  right  to  pass  this  law,  there  can  be  no . 
question ;  and  that  individuals  holding  the  bonds  or  other  evidences  against 
the  late  Republic  were  bound  by  it,  there  can  be  as  little." 

If  these  principles  be  true,  they  ought  to  be  universally  adopted; 
for  what  is  right  in  Texas,  cannot  be  wrong  in  Virginia,  Pennsyl 
vania,  or  Ohio. 

If  these  principles  be  true,  they  will  prove  a  great  relief  to  ne 
cessitous  governments;  for,  according  to  the  doctrine  above  laid 
down,  the  stronger  the  necessity  a  State  is  under,  in  times  of  ad 
versity,  of  entering  into  contracts  for  supplies  of  money,  the 
stronger  the  reason  for  setting  aside  such  contracts  in  the  days  of 
her  prosperity.  The  greater  the  necessities  of  a  government,  the 
less  favorable,  of  course,  the  terms  on  which  it  can  borrow ;  but  it 
will  lose  nothing  in  the  long  run  by  that,  for  neither  "morality  nor 
religion"  requires  it  ever  to  pay  more  than  it  has  received.  More 
especially  is  this  true,  if  the  evidences  of  public  debt  pass  into  the 
hands  of  moneyed  men ;  and  as  the  great  mass  of  the  evidences  of 
public  debt  always  pass  into  such  hands,  the  State  is  thereby  re 
lieved  from  its  engagements.  It  is  quite  enough  if  it  pays  one- 
half,  one-quarter,  or  one-fifth  of  what  it  has  promised  to  pay. 
That  the  Legislature  has  a  right  to  pass  such  a  law  as  this,  there 
can  be  no  question ;  and  as  little  question  that  the  creditors  are 
bound  by  it! 

Such  are  the  principles  of  the  authorities  of  Texas.  If  they  be 
true,  they  ought,  as  already  remarked,  to  be  universally  adopted. 
If  they  be  not  true,  they  ought  to  be  promptly  rejected.  With 
nearly  all  our  States  and  cities,  and  many  of  our  counties,  running 
into  debt,  it  is  of  great  importance  that  the  nature  of  the  obliga 
tion  which  public  debt  imposes  should  be  correctly  understood. 
Public  opinion  is,  to  a  very  great  extent,  the  practical  rule  of 
morality;  and  if  a  wrong  public  opinion  prevails  in  one  State,  it 
will  be  apt  to  spread  into  others.  Ours  is,  moreover,  a  family  of 


Xll  INTRODUCTION. 

States;  and  if  one  member  of  a  family  does  ill,  all  the  other  mem 
bers  will  suffer  in  reputation. 

If  sovereign  States  are  not  bound  by  their  contracts,  neither- are 
railroad,  nor  canal  companies,  nor  individuals;  for  there  cannot 
be  one  rule  of  justice  and  morality  for  men  in  public,  and  another 
for  men  in  private  life. 

There  is  already  too  much  indifference  in  this  country  about  the 
payment  of  debts.  The  public  authorities  ought  not  to  increase 
the  evil  by  setting  the  people  a  bad  example.  But  if  the  States, 
to  whom  men  look  up  for  the  administration  of  justice,  become  lax 
in  the  fulfilment  of  their  public  obligations,  private  men  will  be  very 
apt  to  become  equally  lax  in  the  discharge  of  their  individual 
liabilities. 

We  can  assure  our  friends  in  Texas  that  nothing  was  further 
from  our  intention,  when  we  visited  them,  than  to  make  a  book 
about  them.  We  were  much  pleased  with  their  beautiful  country, 
and  much  pleased  with  the  people,  a  few  only  excepted.  But  the 
people  with  all  their  intelligence  and  enterprise,  and  their  country 
with  all  its  advantages,  will  never  be  duly  appreciated  by  the  rest 
of  the  world,  till  they  review  the  decision  to  which  they  have  come 
respecting  the  debt  incurred  in  achieving  and  sustaining  their 
independence.  In  our  pages,  we  have  carefully  brought  together 
all  the  facts  necessary  for  such  review,  together  with  whatever 
else  is  interesting  in  the  history  of  finance  and  currency  in  Texas. 
If  we  have  erred,  it  has  not  been  from  selfish  interests,  for  we 
have  never  been  an  owner  of  one  dollar's  worth  of  Texan  securities. 


CONTENTS. 


CHAPTER    I. 

PROCEEDINGS  UNDER  THE  GENERAL  CONSULTATION. 

Meeting  of  the  Consultation,  October  16, 1835 — Reassembling  of  the  same,  November 
3 — Report  on  supplies  sent  to  the  army,  and  on  money  in  the  treasury — Glance  at 
military  operations — Extracts  from  the  speech  of  Mr.  Branch  Tanner  Archer — 
Money  received  from  Mr.  Thomas  F.  McKinney  and  from  citizens  of  New  Orleans 
— The  land-offices  closed — Grants  of  land  to  settlers  and  soldiers  .  .  17 

CHAPTER    II. 

LEGISLATIVE  PROCEEDINGS  UNDER  THE  PROVISIONAL  GOVERNMENT. 

Ordinances  to  raise  an  army  and  navy,  and  to  supply  them  with  necessaries — Pro 
vision  for  auditing  claims — Duties  on  imports  and  tonnage — Collectors  of  public 
dues — Act  to  authorize  a  temporary  loan  of  one  hundred  thousand,  and  a  per 
manent  loan  of  one  million  dollars — Other  ways  and  means — Liberal  grants  of 
land  to  soldiers  ...........  23 

CHAPTER    III. 

EXECUTIVE  PROCEEDINGS  OF  THE  PROVISIONAL  GOVERNMENT.   FIRST  PERIOD  : 
NOVEMBER  14,  1835,  TO  JANUARY  2,  1836. 

Comprehensive  proceedings  in  four  months — Pecuniary  affairs  of  the  General  Coun 
cil — A  treasurer  appointed — First  report  of  Committee  on  Finance — Donation  of 
Mr.  Hutchins,  of  Natchez — Proceedings  in  relation  to  a  United  States  Bank  note — 
Plan  for  raising  a  revenue — Gov.  Smith's  objections  to  the  way  in  which  money- 
matters  were  conducted — Small  costs  of  the  campaign — Loan  from  Mr.  Brook- 
field,  of  New  Orleans 29 

CHAPTER    IV. 

PROCEEDINGS  UNDER  THE  PROVISIONAL  GOVERNMENT  IN  RELATION  TO  THE  PUBLIC 

LANDS. 

The  Commissioner  of  the  Nashville  Colony  arraigned  for  contumacy — Great  diffi 
culties  with  the  land-speculators  in  the  Department  of  Nacogdoches — Indig 
nation  of  Governor  Smith — Determined  action  of  the  Council  37 


XIV  CONTENTS. 


CHAPTER    V. 

EXECUTIVE   PROCEEDINGS    UNDER   THE    PROVISIONAL   GOVERNMENT.       SECOND  PERIOD: 
JANUARY  2  TO  MARCH  13,  1836. 

Condition  of  affairs  at  the  beginning  of  1836 — Two  vessels  of  war  procured — Pros 
pect  of  loans  in  New  Orleans — Conflicts  of  Governor  Smith  and  the  Council — 
Mr.  Smith  superseded,  and  Mr.  Robinson  made  acting  governor  .  .  42 

CHAPTER    VI. 

PROCEEDINGS  UNDER  THE  GOVERNMENT  AD  INTERIM,  1836. 

Movements  of  Santa  Anna — His  capture  by  the  Texans — David  G.  Burnett,  Presi 
dent  ad  interim — Gloomy  condition  of  affairs  as  set  forth  in  his  message  to  the 
first  Congress — Small  cost  of  the  war  to  Sept.  1836 — Small  revenue  of  Provisional 
Government — Loans  of  Messrs.  Erwin,  Triplett,  and  their  associates  .  .  49 

CHAPTER    VII. 

PROCEEDINGS  UNDER  THE  REPUBLIC.       FIRST  SESSION  OF  FIRST  CONGRESS  : 
OCTOBER  3  TO  DECEMBER,  1836. 

Gen.  Houston  installed  as  President — Deplorable  condition  of  the  navy — Contribu 
tions  of  Gen.  Thos.  J.  Green — Acts  relating  to  the  military  establishment — High 
salaries  of  officers  on  the  civil  list — New  tariff,  and  sale  of  Galveston  town -plot — 
"  A  public  debt  a  public  blessing" — Unsuccessful  effort  to  negotiate  a  loan  of 
twenty  thousand  dollars — Act  to  establish  a  general  land-office — Questions  whether 
foreign  volunteers  should  be  allowed  to  sell  their  land-certificates  to  aliens,  and 
whether  aliens  should  be  allowed  to  hold  lands  in  Texas — Recognition  of  decree 
for  establishing  the  Agricultural  and  Commercial  Bank — Act  to  incorporate  the 
Texas  Railroad,  Navigation,  and  Banking  Company — Proceedings  under  this  act 

54 

CHAPTER    VIII. 

SECOND  SESSION  OF  THE  FIRST  CONGRESS  :    MAY  1  TO  JUNE,   1837. 

Pecuniary  destitution  of  the  Government  of  the  Republic — Recognition  of  its  inde 
pendence  by  the  United  States — Statement  by  President  Houston  of  the  insuffi 
ciency  of  the  navy — Governor  Smith  made  Secretary  of  the  Treasury — Proceedings 
of  the  agencies  at  Mobile  and  New  Orleans — The  Secretary  of  the  Treasury  re 
ports  a  plan  for  raising  a  revenue,  and  funding  the  outstanding  debt — Acts  passed 
accordingly — Government  liabilities  worth  only  fifteen  cents  in  the  dollar — Projects 
for  additional  banks — Deplorable  condition  of  the  treasury — First  effective  act  for 
the  issue  of  treasury  notes  .........  62 

CHAPTER    IX. 

"  CALLED  SESSION"  OF  THE  SECOND  CONGRESS  :  SEPTEMBER  25  TO  NOVEMBER  4,  1837. 

The  opening  of  the  land-offices  postponed — Differences  of  opinion  of  the  Secretary 
of  the  Treasury  and  Congress  on  the  subject  of  treasury  notes — Reasons  for  not 


CONTENTS.  XV 

issuing  land-script  to  the  soldiers — Low  price  of  land-script  at  New  Orleans — Act 
for  augmenting  the  navy 68 

CHAPTER    X. 

FIRST  REGULAR  SESSION  OF  SECOND  CONGRESS  :    NOVEMBER  6  TO  DECEMBER,  1837. 

Issues  of  treasury  notes  commenced  November  1,  1837 — New  difficulties  between 
the  Secretary  of  the  Treasury  and  Congress — Want  of  money  and  want  of  credit 
— "Boundless  revenue"  expected  from  the  opening  of  the  land-offices — The  navy 
almost  extinct — Moderate  amount  of  public  expenses  up  to  November,  1837 — A 
new  tariff — Authority  for  the  issue  of  more  treasury  notes — Distinction  between 
original  holders  and  assignees  of  Texan  securities — The  agent  sent  to  the  United 
States  to  sell  land-script  recalled — Unreasonable  expectations  of  the  Texan 
Government  in  relation  to  its  public  lands — New  act  for  opening  the  land-offices  71 

CHAPTER    XI. 

ADJOURNED  SESSION  OF  SECOND  CONGRESS:    APRIL  9,  1838,   TO  MAT  24,   1838. 

Treasury  notes  at  par — Reasons  for  this — New  issues  authorized — The  loan  act 
modified — Increase  of  public  expenditures  ......  77 

CHAPTER    XII. 

THIRD  CONGRESS  :    FROM  NOVEMBER  5  TO  DECEMBER  11,  1838. 

Fraudulent  land  claims — The  navy  totally  destroyed — Extensive  entries  of  lands — 
Income  and  expenses — Sanguine  expectations  of  revenue — Imports  and  exports — 
Plan  for  creating  a  creditor  interest  in  the  United  States  friendly  to  Texas  82 

CHAPTER    XIII. 

THIRD  CONGRESS  :  FROM  DECEMBER  10,  1838,  TO  JAN.  26,  1839. 

President  Lamar's  views  of  exchequer  bills  and  treasury  notes — He  recommends  a 
national  bank,  founded  on  the  credit  and  resources  of  the  Government  of  Texas 
— Government  banking  the  worst  form  of  banking — Refusal  to  make  treasury 
notes  a  legal  tender  for  private  debts — Authority  given  to  raise  additional  troops — 
The  steam-vessel  "Zavalla"  purchased — A  contract  for  the  purchase  of  other  ves 
sels  of  war  recognized  by  law — Stock  books  again  opened  for  funding  the  floating 
debt — Act  to  establish  a  sinking  fund — Officers  of  government  required  to  re 
ceive  their  dues  in  treasury  notes  ........  87 

CHAPTER    XIV. 

FROM  THE  CLOSE  OF  THE  THIRD  TO  THE  CLOSE  OF  THE  FOURTH  CONGRESS  :  FEBRUARY, 
1839,  TO  OCTOBER,  1840. 

Loan  from  the  Commercial  and  Railroad  Bank  of  Vicksburg  frustrated — Encouraging 
prospects  of  a  loan  in  Europe — Hopes  of  a  large  revenue  from  customs,  and  other 
taxes — Joy  on  hearing  of  a  loan  from  the  United  States  Bank — Removal  of  seat 
of  government  to  Austin — Extracts  from  President  Lamar's  message  to  fourth  Con 
gress — Deficiency  of  revenue — New  revenue  act — Act  to  provide  for  more  certain 


XVI  CONTENTS. 

operation  of  the  sinking  fund — For  issue  of  treasury  bonds — For  funding  the 
floating  debt  in  eight  and  ten  per  cent,  stocks — Low  price  of  treasury  notes,  and 
gloomy  condition  of  affairs  .........  95 

CHAPTER    XV. 

PROCEEDINGS  UNDER  THE  FIFTH  CONGRESS:  NOVEMBER,  1840,  TO  NOVEMBER,  1841. 

Various  devices  for  borrowing — Remarks  of  the  new  Speaker  of  the  House  of  Repre 
sentatives — Smallness  of  the  revenues — Great  increase  of  the  public  debt — Pro 
ject  of  invading  Mexico — Repeal  of  act  for  funding  treasury  notes — Retrenchment 
of  public  expenses — Annunciation  that  a  loan  had  been  negotiated  in  Europe — 
Effect  of  this  news  on  the  public  mind,  and  on  the  price  of  Texan  securities — Mr. 
Horseley  Palmer,  ex-Governor  of  the  Bank  of  England,  plans  a  national  bank  for 
Texas,  to  be  presided  over  by  Mr.  Jaudon,  ex-cashier  of  the  United  States  Bank — 
News  of  the  negotiation  of  the  loan  confirmed — Doubts  subsequently  arise — Mr. 
Bullock  and  his  pigs — Difficulties  with  M.  de  Saligny,  the  Minister  of  France  to 
Texas 103 

CHAPTER    XVI. 

PROCEEDINGS  UNDER  THE  SIXTH  CONGRESS  :    NOVEMBER,   1841. 

Connection  of  events,  great  and  small — The  loan  defeated — Increased  confusion  in 
finances — The  Secretary  of  the  Treasury  suggests  that  all  debts  of  the  government 
be  funded  in  a  stock  bearing  two  and  a  half  per  cent,  interest — This  the  first 
suggestion  of  scaling  or  repudiation  in  Texas — Contrast  of  financial  affairs  at  the 
beginning  and  close  of  President  Lamar's  administration  ....  112 

CHAPTER    XVII. 

PROCEEDINGS  UNDER  THE  SIXTH  CONGRESS,  IN  CONTINUATION:    NOVEMBER,   1841,  TO 

NOVEMBER,   1842. 

General  Hunt's  view  of  financial  affairs  at  the  commencement  of  President  Houston's 
second  term — Exchequer  bills  issued — Treasury  notes  no  longer  received  for  cus 
toms  and  direct  taxes — Extra  session  of  sixth  Congress — Exchequer  bills  below 
par — Act  making  them  receivable  for  public  dues  at  only  their  market  rates — The 
preliminaries  for  a  loan  of  one  million  dollars  entered  into  with  Mr.  Bourgeois  116 

CHAPTER    XVIII. 

PROCEEDINGS  UNDER  THE  SEVENTH  CONGRESS  :  NOVEMBER,  1842,  TO  NOVEMBER,  1843. 

Gloomy  condition  of  public  affairs  as  depicted  in  President  Houston's  message — 
The  removal  of  the  archives  of  the  Land-Office  forcibly  resisted — Exchequer  bills 
of  small  denominations  issued 120 

CHAPTER    XIX. 

PROCEEDINGS  UNDER  THE  EIGHTH  CONGRESS  :    1843-44. 

Repudiation  denounced  by  President  Houston — The  negotiation  for  a  loan  with 
Mr.  Bourgeois  unsuccessful — Commencement  of  hard-money  policy — Low  rate 
of  exchequer  bills — Objections  to  paper  issues  receivable  for  public  dues  .  123 


CONTENTS.  XV11 

CHAPTER    XX. 

PROCEEDINGS  UNDER  THE  NINTH  CONGRESS  :    1844-45. 

The  finances  somewhat  improved — Contrast  of  expenditures  in  Lamar's  and  Hous 
ton's  second  term — Idem  of  imports  and  exports — Sound  views  of  President 
Jones — The  further  issue  prohibited  of  exchequer  bills,  and  other  paper  intended 
to  pass  as  money — The  receipt  of  paper  for  public  dues  forbidden  .  .126 

CHAPTER    XXI. 

PROCEEDINGS  UNDER  THE  NINTH  CONGRESS,  CONTINUED:   1845. 

The  Congress  of  the  United  States  pass  a  resolution  for  annexing  Texas  to  the 
Union — The  people  of  Texas,  in  convention,  assent  to  the  terms,  and  adopt  a 
constitution  for  the  State  of  Texas — Provisions  in  relation  to  public  debt  and 
government  paper-money — Extract  from  report  of  Commissioner  of  General  Land- 
Office — Great  extent  of  land  held  by  individuals — View  of  public  lands  as  a 
means  of  paying  public  debts  .  .  .  .  .  .  .  .  .130 

CHAPTER    XXII. 

GENERAL  VIEW  OF  THE  FISCAL  POLICY  OF  TEXAS. 

Comparison  of  powers  of  the  Continental  and  of  the  Texan  Congress — Comparative 
view  of  continental  money  and  of  Texan  promissory  notes — The  Texan  promis 
sory  notes  more  effective  as  governmental  means,  but  yet  productive  of  great 
evil — Illusion  of  the  Texan  authorities  in  regard  to  loans  and  lands — Frequent 
changes  of  revenue  laws,  and  of  public  tenders — Evils  of  government  issues  135 

CHAPTER    XXIII. 

PROCEEDINGS  UNDER  THE  FIRST  LEGISLATURE  OF  THE  STATE  OF  TEXAS  :    1845-46. 

Improved  condition  of  fiscal  affairs — State  constitution  adopted — Government  of 
the  State  ad  interim — Immediate  benefits  of  annexation — First  meeting  of  the 
Legislature — Reports  to  the  House  and  Senate  in  favor  of  ceding  the  public  lands 
to  the  United  States,  as  a  means  of  paying  the  public  debt — Scaling  of  the  debt 
recommended — Its  injustice — Instances  in  which  the  Governments  of  England  and 
the  United  States  have  engaged  to  pay  more  than  they  received — Texas  borrowed 
on  good  terms,  all  circumstances  considered — Men  who  have  bought  Texan 
securities  might  have  done  better  by  other  investments  .  .  .  .145 

CHAPTER    XXIV. 

PROCEEDINGS  UNDER  THE  SECOND  LEGISLATURE:    1847-48. 

The  scaling  policy  sustained — The  fact  that  the  debt  is  due  to  persons  abroad 
urged  as  one  reason  why  it  should  not  be  paid  in  full — Act  "  to  provide  for  ascer 
taining  the  debt  of  the  late  Republic  of  Texas" — Creditors  ordered  to  bring  in 
their  claims  to  be  scaled  .  ...  156 


XV111  CONTENTS. 

CHAPTER    XXV. 

PROCEEDINGS  UNDER  THE   THIRD  LEGISLATURE  :    1849-50. 

Governor  Wood  recommends  that  land  be  given  to  the  public  creditors — Reasons 
why  Texas  had  no  longer  a  deep  interest  in  sustaining  her  credit — Hardships 
endured  by  civil  officers,  by  soldiers,  and  others — Distinction  between  their  cases 
and  that  of  contract  creditors — Auditor  and  comptroller  make  a  report  scaling 
down  the  claims  of  creditors  to  half  their  original  amount — Time  prolonged  in 
which  audited  claims  might  be  scaled  without  being  "barred" — Audited  claims 
made  exchangeable  for  land-script  at  fifty  cents  an  acre — Act  declaring  that  all 
liabilities  of  the  Republic  shall  cease  to  bear  interest  after  July  1,  1850  161 

CHAPTER    XXVI. 

PROCEEDINGS  AT  FIRST  SESSION  OF  THE  THIRTY-FIRST  CONGRESS  OF  THE  UNITED 

STATES: 1849-50. 

Few,  if  any,  of  the  creditors  embrace  the  offer  of  land  in  payment  of  their  claims — 
Reasons  for  this — Difficulties  about  land-titles — Change  in  the  prospects  of 
Texas — Motion  of  Mr.  Benton  in  the  United  States  Senate — Motion  of  Mr.  Clay 
— Extracts  from  Mr.  Clay's  speech — Motion  of  Mr.  Pearce,  of  Maryland — Extracts 
from  Mr.  Pearce's  speech — Passage  of  the  "Boundary  Bill,"  or  bill  for  drawing  the 
line  between  Texas  and  New  Mexico,  and  for  paying  the  creditors  of  Texas  169 

CHAPTER    XXVII. 

PROCEEDINGS  OF  THE  LEGISLATURE  OF  TEXAS  AT  ITS  SPECIAL  SESSION,  NOVEMBER,  1850, 
AND  AT  ITS  REGULAR  SESSION,  NOVEMBER,  1851. 

The  conditions  of  the  "Boundary  Bill"  formally  accepted — Proud  position  of  Texas 
— Different  constructions  of  some  provisions  of  the  "Boundary  Bill" — Extracts 
from  Governor  Bell's  message,  with  remarks  on  the  same — Bill  reported  "  to  require 
the  creditors  to  sign  releases  to  the  United  States" — The  money  received  applied 
to  other  objects  than  to  the  payment  of  the  debts  for  which  the  United  States 
were  liable 179 

CHAPTER    XXVIII. 

PROCEEDINGS  OF  THE  FOURTH  LEGISLATURE,  CONTINUED. 

Report  of  the  auditor  and  comptroller  scaling  down  the  public  debt — Extracts  from 
and  remarks  on  the  same — Treasury  notes — Ten  per  cent,  consolidated  fund  of 
1837 — Eight  and  ten  per  cent,  funded  debt  of  1846 — Treasury  bonds — Loan 
from  Bank  of  the  United  States — Debt  due  for  steamship  "  Zavalla" — Debts  to 
Dawson,  Schott,  and  Whitney — Difficulties  in  applying  the  scaling  principle — The 
cases  of  assignees  in  some  instances  of  greater  hardship  than  those  of  original 
claimants — Injustice  of  stopping  interest  after  July,  1850 — Act  confirming  the 
award  of  the  auditor  and  comptroller — Governor  Bell  vetoes  the  act,  but  it  passes 
by  a  large  majority 191 


CONTENTS.  XIX 

CHAPTER    XXIX. 

PROCEEDINGS  OF  FOURTH  LEGISLATURE,  CONTINUED  :    1851-52. 

Act  passed  for  the  liquidation  of  the  public  debt — Debt  payable  and  debt  sus 
pended — Effects  of  this  act  in  dividing  the  creditors  into  two  parties,  and  throw 
ing  the  odium  of  non-payment  on  the  United  States — The  money  received  from  the 
United  States  applied  to  pay  the  current  expenses  of  the  State  Government  203 

CHAPTER    XXX. 

PROCEEDINGS  OF  THE  THIRTY-SECOND  CONGRESS  OF  THE  UNITED  STATES  :  FIRST  SESSION, 

1851-52. 

Diversified  action  of  the  creditors — Report  to  United  States  Senate  by  Mr.  Pearce, 
of  Maryland — Motion  by  Mr.  Mason,  of  Virginia — Remarks  of  Messrs.  Houston, 
Pearce,  Butler,  Pratt,  and  others — Present  condition  of  the  creditors  of  Texas — 
Distinction  between  debts  of  the  Republic  and  debts  of  the  State  .  .  207 

CHAPTER    XXXI. 

TEXAN  PLEDGES  OF  FAITH  AND  TEXAN  BREACHES  OF  FAITH. 

Solemn  league  and  covenant  of  the  Provisional  Government — Audited  drafts — Five 
million  loan  act  and  supplement — Act  of  June  7,  1837,  for  consolidating  public 
debt — Treasury  notes — Act  of  1837  authorizing  receipt  of  audited  drafts  for  direct 
taxes — Act  of  1838  for  payment  of  interest  on  the  funded  debt — Treasury  bonds 
act — Funding  act  of  1840 — Act  to  repeal  the  act  providing  for  the  redemption  of 
promissory  notes — Act  for  the  issue  of  exchequer  bills — Resolution  of  annexa 
tion — Scaling  act  of  1848 — Act  barring  all  claims  not  presented  before  September, 
1850— Act  stopping  interest  after  July  1,  1850 217 

CHAPTER    XXXII. 

GENERAL  VIEW  OF  CURRENCY  IN  TEXAS. 

"  Hammered  dollars"  the  chief  currency  of  Texas  previous  to  the  revolution — Influx 
of  bank-notes  from  the  United  States  in  1835-37 — "Shin-plasters" — Treasury 
notes,  first,  second,  and  third  issues — Evil  consequences  thereof — Exchequer 
bills— Gross  amount  of  circulating  paper — Bank  of  Agriculture  and  Commerce — 
Texas  Railroad,  Navigation,  and  Banking  Company — Other  bank  projects — Laws 
of  the  Republic  and  the  State,  and  constitutional  provisions  to  prevent  the  issue 
of  circulating  paper — "Mills's  money" — A  little  paper-money  panic  in  Texas — 
Good  effects  of  the  hard-money  laws  of  Texas — Efforts  to  change  the  constitution 
so  as  to  allow  of  paper-money  banking  .......  227 

CHAPTER    XXXIII. 

COMPARISON  OF  THE  ACTION   OF  TEXAS,  THE    OTHER   STATES,  AND  THE   UNITED  STATES, 
IN  RELATION  TO  PUBLIC  DEBTS. 

Laws  of  Texas  concerning  interest  on  private  debts — Their  good  effects — Erroneous 
views  of  the  Texans  concerning  their  public  debts — Arguments  drawn  from  the 
action  of  the  United  States  in  relation  to  continental  currency  shown  to  be  un 
founded — Contrast  of  the  conduct  of  Texas  and  that  of  the  other  States  in  rela 
tion  to  public  debts 240 


XX  CONTENTS. 

CHAPTER    XXXIV. 

PRESENT  CONDITION  OF  TEXAS. 

Improved  condition  of  Texas  as  set  forth  in  the  inaugural  addresses  of  Governor 
Bell  and  Lieutcnant-Governor  Henderson— Contrast  with  its  condition  a  few  years 
previous  as  set  forth  by  President  Houston — This  the  result  of  annexation,  and 
this  "  a  sufficient  consideration"  for  all  the  debts  Texas  has  incurred — Complaints 
against  Texas — Unreasonable  demands  of  her  public  men — Land-speculations  in 
Texas — Their  effects  on  the  public  mind — Popular  arguments  of  the  Texans  in 
favor  of  scaling — Led  to  scaling  in  part  by  the  necessity  of  making  equation  of 
currencies — Audited  claims  not  to  be  reopened — Popular  arguments  in  favor  of 
scaling  briefly  examined — Less  made  by  investments  in  Texan  securities  than  by 
other  investments — Prices  of  leading  stocks  in  New  York  market  in  1842,  1845, 
and  1852 — Prices  of  bank  and  other  stocks  in  Philadelphia  in  1842,  1845,  and 
1852 — Bad  effects  on  American  reputation  in  Europe  if  Texas  does  not  review  her 
course — Indications  of  a  change  for  the  better  in  public  sentiment  in  Texas — The 
interest  of  Texas  will  be  promoted  by  her  complying  with  her  contracts  .  249 


APPENDIX. 

A. — Amount  of  audited  drafts 267 

B. — Promissory  notes 268 

C.— Revenues  of  the  Republic  of  Texas  from  September,  1835,  to  October,  1851  270 
D. — Recapitulation  of  revenue  of  the  Republic  of  Texas,  showing  the  total 

amount  of  each  branch        .........  271 

E. — Kind  of  funds  received   ..........  273 

F. — Tabular  view  of  the  debt  of  Texas  at  different  periods     ....  275 

G. — Imports  and  exports  of  the  Republic  of  Texas         .....  277 

H. — Receipts  from  customs  during  the  year  ending  July  31,  1844  .         .         .  278 
I. — Statements  showing  the  whole  amount  of  exchequer  bills  issued  by  the 

treasury  department,  and  their  market  value        .....  279 

K— The  public  lands  and  land-script 280 

L.—  Revenue  laws  of  Texas 282 

M. — Tenders  for  public  dues  in  Texas  ........  284 

N. — Revenue  and  expenditures  of  the  State  of  Texas 286 

O. — Assessments  in  Texas 289 

P. — Agricultural  statistics  of  forty-one  counties  in  1848         ....  291 

Q. — Act  of  annexation  ...........  292 

R. — The  boundary  act 294 

S. — An  act  providing  for  the  liquidation  and  payment  of  the  debt  of  the  late 

Republic  of  Texas,  January  31,  1852 295 

T. — Report  to  President  of  the  United  States,  by  the  Secretary  of  the  Trea 
sury,  on  the  public  debt  of  Texas 298 

U. — Report  of  the  auditor  and  comptroller  to  the  fourth  legislature  on  the 

public  debt  of  Texas 304 

V. — Mr.  Pearce's  report 312 

W.— Debts  of  the  Republic  and  Debts  of  the  State 317 


THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    I. 

PROCEEDINGS  UNDER  THE  GENERAL  CONSULTATION. 

Meeting  of  the  Consultation,  October  16, 1835 — Reassembling  of  the  same,  November 
3 — Report  on  supplies  sent  to  the  army,  and  on  money  in  the  treasury — Glance  at 
military  operations — Extracts  from  the  speech  of  Mr.  Branch  Tanner  Archer — 
Money  received  from  Mr.  Thomas  F.  McKinney  and  from  citizens  of  New  Orleans 
— The  land-offices  closed — Grants  of  land  to  settlers  and  soldiers. 

IT  is  no  part  of  our  plan  to  give  a  particular  view  of  the  con 
siderations  that  induced  the  Texans  to  dissolve  their  connection 
with  Mexico.  Suffice  it  to  say  that  land-speculations  and  anti 
pathy  of  race  appear  to  have  been  the  main  causes  of  the  revolu 
tion,  the  incidents  connected  with  which  we  propose  to  narrate  so 
far  only  as  connected  with  the  dehts  thereby  incurred. 

On  the  15th  of  August,  1835,  the  citizens  of  the  town  of  Co 
lumbia  held  a  meeting,  appointed  a  Committee  of  Safety  and  Cor 
respondence,  and  resolved  "  that  a  Consultation  of  all  Texas, 
through  her  representatives,  was  indispensable." 

On  the  16th  of  October  following,  between  thirty  and  forty 
representatives,  from  eight  different  municipalities,  assembled  in 
General  Consultation  at  San  Felipe  de  Austin ;  but  adjourned  on 
the  next  day  to  the  1st  of  November,  because  "  there  was  not  a 
sufficient  number  to  form  a  quorum,  owing  to  the  members  being 
absent  in  the  army."  Before  adjourning,  they  authorized  such  of 
their  number  as  could  not  join  the  army  to  unite  with  a  General 
Council,  which  had  been  instituted  on  the  llth.  Of  this  Council, 
Mr.  R.  R.  Royal  was  President. 

On  the  1st  of  November,  the  General  Consultation  reassembled  ; 
2 


18  THE  FISCAL  HISTORY  OF  TEXAS. 

but  they  were  not  able  to  form  a  quorum  till  the  3d.  They  then 
elected  Branch  Tanner  Archer  President ;  and  on  the  same  day, 
the  Council,  of  which  Mr.  Royal  was  President,  resigned  their 
powers. 

In  their  report  to  the  Consultation,  they  say : — 

"  On  the  14th  of  October,  Mr.  Lewis  Hall  was  commissioned  as  con 
tractor  for  the  army,  from  whose  reports  there  are  reasons  to  believe  that 
upwards  of  one  hundred  beeves  and  a  considerable  quantity  of  corn-meal 
are  on  the  way  or  repairing  to  head-quarters ;  and  as  connected  with  this 
subject,  we  will  also  inform  you  that  supplies  of  sugar,  coffee,  bacon,  blan 
kets,  shoes,  tents,  clothes,  &c.  have  been  forwarded  from  Columbia,  Bra- 
zoria,  and  Matagorda. 

"  We  have  reason  to  believe  that  one  eigh teen-pounder  and  a  twelve- 
pounder  of  artillery  are  on  the  way,  with  a  fair  proportion  of  powder  and 
ball. 

"  The  Council  has  made  provisions  for  the  collection  of  the  public  dues. 

"  We  authorized  a  contract  for  a  loan  of  one  hundred  thousand  dollars  of 
the  citizens  of  New  Orleans,  and  appointed  T.  F.  McKinney  an  agent  to 
repair  to  New  Orleans,  and  to  carry  it  into  effect. 

"  Our  finances  arising  from  the  receipt  of  dues  for  lands,  as  will  appear  on 
file  in  Mr.  Gail  Borden's  report,  marked  F,  which  were  in  his  hands,  are 
fifty-eight  dollars  and  thirty  cents.  This  money  has  been  exhausted,  and 
an  advance  by  the  President  of  the  Council  of  thirty-six  dollars.  There 
were  also  several  hundred  dollars  in  the  hands  of  Mr.  Money,  the  alcalde 
of  the  municipality  of  Austin.  Upon  this  money  several  advances  have 
been  made  by  Mr.  Cochran,  and  probably  will  nearly  cover  the  amount 
of  the  money  in  the  alcalde's  hands;  as  such, you  may  consider  that  at  this 
moment  the  Council  is  out  of  funds." 

"  Despise  not  the  day  of  small  things.''  As  we  proceed,  we 
shall  find  the  Government  of  Texas  running  in  debt  to  the  amount 
of  millions,  and,  what  is  more,  acquiring  the  ability  to  pay  all  it 
owes.  Even  now  we  find  all  the  germs  of  an  extended  fiscal  sys 
tem — contracts  for  purchases  —  measures  for  the  collection  of 
public  dues — and  authority  to  negotiate  a  loan.  Besides  this, 
the  Council  suspended  the  proceedings  of  the  land-offices,  issued 
letters  of  marque  and  reprisal,  established  a  mail  route,  and  au 
thorized  the  raising  of  three  companies  of  volunteer  rangers, 
amounting  in  all  to  eighty-five  men,  " promising  each  volunteer 
one  dollar  and  twenty-five  cents  a  day." 

Even  before  the  Consultation  assembled,  the  miniature  armies 
of  Texas  were  active  in  the  field.  Hostilities  may  be  said  to  have 
commenced  on  the  20th  of  September,  when  a  detachment  of 
about  two  hundred  Mexican  cavalry  from  Bexar  arrived  on  the 
western  bank  of  the  Guadaloupe,  and  attempted  the  passage  of 


THE  FISCAL  HISTORY  OF  TEXAS.  19 

the  river ;  but  were  repulsed  by  eighteen  men  under  Captain 
Albert  Martin,  the  whole  of  the  available  force  then  at  Gonzales. 
(Kennedy,  vol.  i.  p.  107.)  On  the  1st  of  October,  under  the 
command  of  Colonel  Moore,  they  put  to  route  the  Mexicans  under 
General  Castonado ;  and  on  the  8th,  under  Captain  Collinsworth, 
they  attacked  and  captured  the  fort  of  Goliad,  containing  stores 
to  the  amount  of  ten  thousand  dollars,  with  two  brass  cannon  and 
three  hundred  stand  of  arms.  A  still  more  important  encounter 
was  that  of  the  28th  of  October,  near  the  mission  of  the  Concep 
tion,  when  ninety-two  Texans,  under  the  command  of  Colonel 
Bowie  and  Captain  Fannin,  met  a  detachment  of  the  Mexicans, 
consisting  of  about  four  hundred  men,  and  obtained  a  complete 
victory  over  them. 

But  the  glories  of  the  field  we  must  leave  to  more  ambitious 
historians.  The  humble  subject  of  dollars  and  cents  engages  our 
attention.  We  cannot,  therefore,  stop  to  tell  how,  on  the  3d  of 
November,  a  detachment  of  fifty  men  from  Goliad,  under  Adju 
tant  Westover,  attacked  and  entered  Lipantitlan,  near  San  Pa- 
tricio,  the  garrison  of  which  (in  number  twenty-one)  surrendered, 
and  were  dismissed  on  their  parole  on  condition  of  not  serving 
again  against  Texas  during  the  war.  Neither  can  we  give  the 
particulars  of  the  "  Grass  Fight,"  in  which  five  Mexicans  were 
killed  and  several  wounded,  while  the  Texans  escaped  with  only 
one  man?mwounded.  It  is  enough  to  say  that,  on  the  3d  of  No 
vember,  when  the  General  Consultation  was  reorganized,  the 
only  place  of  any  importance  in  Texas  Proper,  in  possession  of 
the  Mexicans,  was  San  Antonio  de  Bexar. 

On  taking  the  chair,  Mr.  Archer,  the  President  elect,  made  an 
address,  in  which  he  suggested  the  propriety  of  establishing  a  pro 
visional  government,  to  consist  of  a  governor,  lieutenant-governor, 
and  council,  who  should  be  clothed  with  both  legislative  and  ex 
ecutive  powers.  Adverting  to  financial  affairs,  he  said : — 

"  It  will  be  necessary  to  procure  funds  in  order  to  establish  the  contem 
plated  government,  and  to  carry  on  the  war  in  which  we  are  now  engaged : 
it  will,  therefore,  be  our  duty  to  elect  agents  to  procure  those  funds. 
Without  funds,  however  heroically  your  armies  may  fight,  however  wisely 
your  councils  may  legislate,  they  will  erect  but  a  baseless  fabric  that  will 
fall  of  its  own  weight." 

The  soundness  of  these  principles  will  not  be  contested  by  the 
reader.  In  times  of  war,  he  who  stays  at  home  and  works  ren- 


20  THE  FISCAL  HISTORY  OF  TEXAS. 

ders  just  as  much  service  to  his  country  as  he  who  goes  out  to 
fight.  If  everybody  should  go  out  to  fight,  everybody  would 
starve.  Without  money,  wisdom  and  valor  avail  nothing.  The 
Rothschilds  and  the  Barings  are  just  as  much  entitled  to  the  glory 
that  results  from  successful  battles  as  are  the  Napoleons  and  the 
Wellingtons. 

To  illustrate  this  by  the  case  now  before  us  :  If  Mr.  Gail  Bor- 
den  had  not  paid  over  the  public  money  then  in  his  hands,  amount 
ing  to  fifty-eight  dollars  and  thirty  cents ;  if  Mr.  President  Royal 
had  not  advanced  thirty-six  dollars;  and  if  Mr.  James  Cochran  had 
not  made  "several  advances,"  amounting  in  all  to  "  several  hun 
dred  dollars,"  how  could  supplies  have  been  sent  to  the  army? 
And  if  supplies  had  not  been  sent  to  the  army,  the  glorious  battle 
of  the  Conception  might  never  have  adorned  the  annals  of  Texas. 
The  captures  of  Goliad  and  Lipantitlan  did,  indeed,  occur  before 
the  fiscal  system  of  the  Council  was  fully  matured ;  but  the  reader 
will  agree  with  us  that,  without  supplies  obtained  from  some  quar 
ter,  it  is  as  impossible  to  capture  cities  as  it  is  to  fight  pitched 
battles. 

"Great  events  from  little  causes  spring."  "The  rights  and 
liberties  of  thousands  of  freemen  are  in  your  hands,"  said  Mr. 
Archer,  in  his  opening  address  to  the  Consultation  ;  "  and  millions 
yet  unborn  maybe  affected  by  your  decisions."  Yes;  and  the 
rights  and  liberties  of  these  thousands  and  millions,  born  and  un 
born,  may  be  more  dependent  on  Mr.  Gail  Borden's  fifty-eight 
dollars  and  thirty  cents,  Mr.  Royal's  thirty-six  dollars,  and  Mr. 
Cochran's  "several  hundred  dollars,"  than  perhaps  any  one  of 
these  gentlemen  has  imagined. 

But  a  truce  to  reflections.  We  must  resume  our  narrative.  On 
the  6th,  in  the  morning,  it  was  resolved  "  that  a  committee  of  five 
be  appointed  to  provide  for  the  necessities  of  our  army  and  troops 
on  the  road  generally,  with  authority  to  borrow  money,  or  origi 
nate  other  debts  for  that  purpose ;"  and  on  the  afternoon  of  the 
same  day,  the  committee  made  report  as  follows : — 

"The  committee,  to  whom  was  referred  the  subject  of  providing  for  the 
necessities  of  the  army,  beg  leave  to  report  that  they  have  received  of 
Thomas  F.  McKirmey,  by  the  hands  of  l)r.  C.  B.  Stewart,  a  loan  of  five 
hundred  dollars,  of  which  they  have  expended,  in  payment  of  drafts  on  the 
authorities,  the  sum  of  two  hundred  and  thirty-eight  dollars,  as  will  appear 
by  the  accompanying  account,  which  leaves  a  balance  in  the  hands  of  Dr. 


THE  FISCAL  HISTORY  OF  TEXAS.  21 

Stewart  of  one  hundred  and  sixty-two  dollars,  and  one  hundred  left  with 
Messrs.  Robert  Mills  &  Co.,  of  Brazoria,  leaving  a  balance  in  hand,  in  all, 
of  two'  hundred  and  sixty-two  dollars.  Paid  to  express  twenty,  after  making 
out  the  account,  leaves  two  hundred  and  fifty-two  dollars." 

Here  we  find  the  national  debt  increasing,  but  not  in  such  a 
way  as  to  cause  regret,  as  it  increased  the  national  means.  And 
these  means  were  further  increased  by  subscriptions  by  the  citizens 
of  New  Orleans,  which,  as  was  formally  announced  to  the  Consul 
tation  on  the  8th,  amounted  to  seven  thousand  dollars,  when  the 
agent,  Mr.  E.  Hall,  left  that  city,  and  were  then  probably  aug 
mented  to  ten  or  fifteen  thousand  dollars. 

The  Consultation  expressed  its  sense  of  the  obligation  conferred 
in  a  letter  of  thanks,  and  made  Captain  Hall  a  present  of  a  league 
of  land,  4428  American  acres.  On  the  9th,  it  made  the  captain 
an  agent  to  purchase  military  stores  at  New  Orleans.  On  the 
llth,  it  adopted  the  plan  of  a  provisional  government.  On  the 
12th,  it  elected  Henry  Smith  Governor,  J.  W.  Robinson  Lieu 
tenant-Governor,  and  chose  a  Council  of  thirteen  members.  On 
the  same  day,  it  elected  Messrs.  B.  T.  Archer,  W.  H.  Wharton, 
and  S.  E.  Austin,  commissioners  to  proceed  to  the  United  States. 
On  the  13th,  the  plan  of  the  Provisional  Government  was  enrolled; 
and,  on  the  14th,  the  Consultation  adjourned  to  meet  on  the  1st 
of  March,  1836,  unless  sooner  called  by  the  Governor  and  Council. 

All  the  proceedings  of  the  General  Council,  and  of  the  Consul 
tation,  appear  to  have  given  satisfaction,  except  an  order  issued  by 
the  first  on  the  27th  of  October,  and  afterwards  strengthened  by 
the  Consultation,  to  close  the  land-offices,  and  to  forbid  all  further 
surveys.  It  was  not  free  from  objection,  inasmuch  as  prudent 
men  are  not  willing  either  to  purchase  land,  or  to  expend  labor  and 
capital  in  its  improvement,  till  the  title  is  fully  secured.  But,  as 
Mr.  Barret  said,  in  a  report  from  a  select  committee  on  November 
13:  "The  land-offices  have  been  closed,  that  no  advantage  should 
be  taken  over  the  soldier  in  the  field,  in  making  his  selections  of 
lands." 

From  the  beginning,  the  Texan  leaders  regarded  the  land  as  the 
chief  means  of  defraying  the  expenses  of  the  war.  Thus,  Mr. 
Archer  said,  in  his  opening  speech : — 

"  Some  of  our  brethren  of  the  United  States  of  the  North,  hearing  of  our 
difficulties,  have  generously  come  to  our  aid ;  many  more  ere  long  will  be 
with  us ;  services  such  as  they  will  render  should  never  be  forgotten.  It 


22  THE  FISCAL  HISTORY  OF  TEXAS. 

•will  be  proper  for  this  Convention  to  secure  them  the  rights  and  privileges 
of  citizens,  and  to  secure  to  them  their  laud  in  l  head-rights/  and  place 
them  on  the  same  footing  with  those  of  our  citizens  who  have  not  J'et  ob 
tained  their  lands. 

"  Some  fraudulent  sales  or  grants  of  land,  by  the  late  Government  of 
Coahuila  and  Texas,  will  require  your  attention." 

In  like  spirit,  the  Consultation  said,  in  their  letter  of  November 
4,  to  the  citizens  of  New  Orleans: — 

"  Any  who  embark  in  our  cause,  in  the  army  or  navy,  shall  be  liberally 
rewarded  in  land  and  money,  and  in  the  blessings  of  a  grateful  and  re 
deemed  people." 

And  the  policy  of  Texas  was  then  fixed,  as  far  as  it  could  be 
by  Article  XIV.,  in  the  plan  of  the  Provisional  Government,  re 
quiring  all  persons,  "in  any  way  concerned  in  the  location  of 
lands,  forthwith  to  cease  their  operations  during  the  agitated  and 
unsettled  state  of  the  country,  and  until  the  land-office  can  be 
properly  systematized,"  and  also  by  the  following  articles  in  ad 
dition  : — 

"  ARTICLE  XV.  All  persons  now  in  Texas  and  performing  the  duties 
of  citizens,  who  have  not  acquired  their  quantum  of  lands,  shall  be  entitled 
to  the  benefit  of  the  laws  on  colonization,  under  which  they  emigrated  ;  and 
all  persons  who  may  emigrate  to  Texas  during  her  conflict  for  constitutional 
liberty,  and  perform  the  duties  of  citizens,  shall  also  receive  the  benefits  of 
the  laws  under  which  they  emigrated. 

"  ARTICLE  XVIII.  All  grants,  sales,  and  conveyances  of  land,  illegally 
and  fraudulently  made  by  the  legislature  of  the  State  of  Coahuila  and 
Texas,  located  or  to  be  located  within  the  limits  of  Texas,  are  hereby 
solemnly  declared  null,  void,  and  of  no  effect. 

"  ARTICLE  XIX.  All  persons  who  leave  the  country  in  its  present 
crisis,  with  a  view  to  avoid  a  participation  in  its  present  struggle,  without 
permission  from  the  alcalde  or  judge  of  their  municipality,  shall  forfeit  all 
or  any  lands  they  may  hold  or  may  have  a  claim  to,  for  the  benefit  of  the 
government :  Provided,  nevertheless,  that  widows  and  minors  are  not  in 
cluded  in  this  provision." 

As  the  colonization  laws  of  Texas  granted  a  league  and  "labor" 
of  land,  equal  to  4604  American  acres,  to  each  settler  who  was 
the  head  of  a  family,  and  the  one-third  of  a  league,  1476  acres, 
to  each  single  man,  the  bounty  thus  granted  was  sufficient  to 
induce  residents  of  other  countries  to  remove  to  Texas,  and  iden 
tify  themselves  with  her  interests. 


THE  FISCAL  HISTORY  OF  TEXAS.  23 


CHAPTER    II. 

LEGISLATIVE  PROCEEDINGS  UNDER  THE  PROVISIONAL   GOVERNMENT. 

Ordinances  to  raise  an  army  and  navy,  and  to  supply  them  with  necessaries — Pro 
vision  for  auditing  claims — Duties  on  imports  and  tonnage — Collectors  of  public 
dues — Act  to  authorize  a  temporary  loan  of  one  hundred  thousand,  and  a  per 
manent  loan  of  one  million  dollars — Other  ways  and  means — Liberal  grants  of 
land  to  soldiers. 

ACCORDING  to  the  recommendation  of  Mr.  Archer,  the  Provi 
sional  Government  was  endowed  with  both  legislative  and  executive 
powers,  and  it  began  to  act  almost  immediately  in  its  double 
capacity. 

It  passed  ordinances  (November  26)  "  to  raise  a  regular  army" 
of  1120  men,  and  "to  organize  a  corps  of  rangers"  of  178  men, 
including  officers ;  (December  8-12),  to  accept  the  services  of  at 
least  5000  volunteers ;  (December  18),  to  create  a  legion  of  ca 
valry,  380  strong;  and  (June  7)  to  raise  an  army  to  be  called 
"  the  Army  of  Reserve  for  the  Protection  of  the  Liberties  of 
Texas,"  to  consist  of  1145  men,  officers  included. 

Not  content  with  these  formidable  preparations  on  land,  it  turned 
its  attention  to  the  sea,  and  (November  27)  passed  "  an  ordinance 
and  decree  to  establish  a  navy" — "  to  consist  of  two  schooners 
of  twelve  guns  each,  and  two  schooners  of  six  guns  each." 

Armies  and  navies  must  be  fed,  paid,  and  clothed.  And, 
accordingly,  the  Provisional  Government  passed  an  ordinance 
(November  19)  to  purchase  provisions  for  the  army;  two  other 
ordinances  (November  30)  to  purchase  munitions  of  war,  provi 
sions,  arms,  &c. ;  a  resolution  (December  6)  to  purchase  articles 
for  the  volunteers;  "  an  ordinance  and  decree  (November  27)  for 
advancing  the  sum  of  fifteen  hundred  dollars  for  the  benefit  of  the 
volunteer  army  of  the  people,  under  the  command  of  General 
Stephen  F.  Austin;"  and  another  (December  2)  "for  supplying 
the  army  of  the  people,  now  before  Bexar,  with  money." 

That  these  duties  might  be  properly  performed,  an  ordinance 


24  THE  FISCAL  HISTORY  OF  TEXAS. 

was  passed  (November  30)  "  for  appointing  a  commissary,  and 
defining  his  duties;"  another  (January  22),  appointing  a  sutler; 
and  another  (December  22),  "  creating  the  office  of  commissary- 
general,  and  regulating  the  offices  of  paymaster  and  quarter 
master-general." 

Nor  was  the  Provisional  Government  insensible  to  the  importance 
of  having  claims  properly  audited,  accounts  regularly  kept,  and  of 
those  various  checks  and  guards  which  are  necessary  in  the  dis 
bursement  of  public  funds.  For  a  time,  the  General  Council  itself 
seems  to  have  performed  all  these  functions,  governed  solely  by 
its  own  discretion ;  but  (November  26)  an  ordinance  was  passed 
"  prescribing  the  manner  and  form  of  settling  the  accounts  of  the 
volunteer  army  of  Texas;"  and,  on  the  same  day,  another  "for 
appointing  a  treasurer,  a  secretary  to  the  executive,  and  two  chief 
clerks,  and  defining  their  several  duties."  This  was  followed  by 
another  (December  2-12),  "  altering  and  changing  the  manner  of 
drawing  drafts  on  the  treasurer;"  by  another  (December  29), 
"  creating  the  offices  of  auditor  and  controller ;"  by  another  (January 
7),  "  prescribing  the  manner  in  which  all  claims  by  volunteers  shall 
be  presented  for  payment,  and  also  to  prevent  frauds  and  imposi 
tions  on  the  government ;"  and,  finally,  by  a  resolution  (January 
17),  for  appointing  a  committee  of  finance  to  act  in  the  place  of 
the  General  Council  when  it  could  not  form  a  quorum. 

But  where  the  use  of  all  this  apparatus  of  treasurer,  controller, 
and  auditor,  if  there  was  neither  money  to  keep  nor  money  to  dis 
burse  ?  The  members  of  the  Provisional  Government  were  men  of 
too  much  sense  not  to  see  this.  They  turned  their  attention  to 
the  ways  and  means  which  other  governments  have  resorted  to  in 
times  of  exigency.  They  found  that  they  might  all  be  resolved 
into  taxing,  borrowing,  begging,  selling,  and  (if  it  be  permitted  to 
use  such  rough  words),  robbing  and  cheating,  and  they  appear  to 
have  determined  to  try  all  six. 

Their  first  act  for  raising  a  revenue  by  taxation  was  passed 
December  12,  and  was  entitled  "An  ordinance  and  decree  establish 
ing  duties  on  imports  and  tonnage,  and  for  other  purposes."  It 
imposed  duties  of  ten  and  twenty  per  cent,  on  foreign  goods  ;  but 
made  free  sundry  articles.  This  was  followed  by  a  supplement 
(December  15),  imposing  a  tonnage-duty  of  one  dollar  and  twenty- 
five  cents  per  ton,  and  establishing  a  duty  of  twelve  and  a  half 


THE  FISCAL  HISTORY  OF  TEXAS.  25 

cents  a  gallon  on  whiskey,  American  gin,  rum,  and  brandy.  But 
hardly  had  this  act  time  to  reach  the  seaports,  when  (December 
27),  with  worse  than  American  instability  in  tariff  matters,  another 
act  was  passed  raising  the  duties  to  fifteen  and  twenty-five  per 
cent,  ad  valorem,  and  embracing  a  new  list  of  non-dutiable  articles. 

This  was  followed  (December  30)  by  an  ordinance  and  decree 
appointing  collectors  of  public  dues,  i.  e.  on  lands  granted  or  sold, 
an  ordinance  which  amounted  to  nothing,  so  far  as  effective  revenue 
was  concerned,  inasmuch  as  it  provided  that  "  duly  audited  treasury 
orders"  should  be  received  in  payment.  A  supplemental  ordinance 
was  passed  on  the  same  day,  and  another  January  15.  This  last 
was  intended  to  obviate  the  inconvenience  those  persons  sustained 
whose  audited  drafts  exceeded  the  amount  they  had  to  pay  for  land 
dues.  In  such  cases,  the  collector  was  authorized  to  indorse  on 
the  back  the  amount  the  public  debtor  had  paid  in,  and  he  could 
apply  the  balance  of  the  draft  to  other  purposes. 

The  chief  reliance  of  the  Provisional  Government  was,  however, 
on  loans,  and  it  passed  several  acts  with  a  view  of  effecting  this 
object.  The  first  of  these  (November  24)  authorized  and  empowered 
Thomas  F.  McKinney,  of  Velasco,  to  borrow  one  hundred  thousand 
dollars  for  a  period  of  not  less  than  one  year,  at  a  rate  not  exceed 
ing  ten  per  cent,  per  annum.  Another  act,  explanatory  of  this, 
passed  Jan.  10, 1836,  authorized  Thomas  F.  McKinney  and  Samuel 
M.  Williams  to  execute  the  bonds ;  to  borrow  part  of  one  hundred 
thousand  dollars,  if  they  could  not  borrow  the  whole;  and  made  the 
bonds  (in  six  months  from  the  date  of  their  issue)  receivable  at  par 
value  in  payment  of  any  debts  due  to  Texas  for  lands  or  other 
revenues. 

This  was  designed  to  secure  a  temporary  loan.  Another  act, 
passed  December  4,  "  created  a  loan  of  one  million  dollars;"  in 
structed  Messrs.  Austin,  Archer,  and  "Wharton  to  negotiate  the 
same  at  a  rate  not  exceeding  ten  per  cent,  per  annum ;  and  directed 
the  Governor  to  cause  the  bonds  to  be  made  out  for  one  hundred 
thousand  dollars  each,  for  a  period  of  not  less  than  five  nor  more 
than  ten  years,  payable  in  the  city  of  New  York,  or  any  other  city 
of  the  United  States,  as  the  case  might  require.  By  another  act 
(December  5),  the  commissioners  were  instructed 

"  To  pledge  or  hypothecate  the  public  lands  of  Texas,  and  to  pledge  the 
public  faith  of  Texas,  in  such  manner,  and  with  such  restrictions  as  shall 


26  THE  FISCAL  HISTORY  OF  TEXAS. 

best  comport  with  the  honor  and  dignity  of  the  State,  and  give  effect  to  the 
pledges :  Provided,  also,  that  the  said  commissioners  shall  be  authorized 
and  instructed  to  create  a  stock  or  funded  debt,  upon  such  pledges  as  may 
be  agreed  upon,  to  be  sold  in  shares  on  terms  such  as  will  not  exceed  the 
rate  per  cent,  ordained  in  the  ordinance  authorizing  a  loan  for  Texas : 
And  be  it  aho  further  provided,  that  such  part  or  parts  of  the  public 
revenues  of  the  country  may  be  pledged  as  shall  be  sufficient  to  pay  the 
annual  interest  upon  any  and  all  loans  effected  under  the  restrictions  here 
inbefore  stated." 

Thus  the  act  gave  the  commissioners  power  to  pledge  the  public 
faith,  the  public  lands,  the  public  revenues — everything  that  Texas 
possessed. 

The  government  tried  to  sell,  offering  land  script  in  great 
abundance,  but  found  few  willing  to  buy. 

Begging  is  a  mode  of  raising  ways  and  means  which  the  Kings 
of  England  frequently  resorted  to  in  old  times.  But  the  Govern 
ment  of  Texas  did  nothing  more  in  this  way  than  pass  a  resolu 
tion  (December  8)  authorizing  its  foreign  agents  to  receive  all 
moneys  and  donations  of  any  kind  that  might  be  given  or  presented 
to  Texas,  by  citizens  of  the  country  which  they  might  visit.  There 
was  no  impropriety  in  this,  as  many  citizens  of  the  United  States 
had  shown  a  disposition  to  contribute  before  being  solicited. 

Robbing  is  another  governmental  mode  of  raising  revenue.  The 
Provisional  Government  tried  its  hand  at  this  in  two  ways  ;  at  least 
we  find  it  difficult  to  give  any  other  interpretation  to  a  resolution 
adopted  January  IT,  1836,  in  the  words  following,  to  wit : — 

"  SECTION  I.  Whereas,  the  troops  garrisoned  at  Bexar  being  without 
the  necessary  provisions  and  clothing  for  their  support  and  comfort,  and 
the  probability  of  its  being  some  time  yet  before  the  necessary  supplies  from 
our  agents  in  the  United  States,  for  the  support,  subsistence,  and  use  of  the 
army,  will  be  received ;  and  it  being  absolutely  necessary  to  make  immediate 
provisions  for  the  sustenance  and  support  of  these  troops  at  Bexar ;  and 
it  beiiKj  impossible  to  drive  beeves  and  procure  provisions  for  their  use, 
without  horses:1'  Therefore 

"  Be  it  resolved,  by  the  General  Council  of  the  Provisional  Government 
of  Texas,  that  Lieutenant-Colonel  Neill,  commandant  at  Bexar,  be,  and  is 
hereby  authorized  and  empowered  to  employ  as  many  Mexicans,  or  other 
citizens,  for  the  purpose  of  driving  up  beeves,  and  procuring  provisions  for 
the  troops  under  his  command,  as  may  be  required  for  that  purpose." 

This,  however,  may  have  been  regarded  as  only  reprisal.  Much 
of  the  war  between  the  Mexicans  and  Texans  was  of  a  predatory 
character,  and  such  will  always  be  the  character  of  war  between 


THE  FISCAL  HISTORY  OF  TEXAS.  27 

nations  whose  wealth  consists  principally  in  cattle,  whether  they 
be  Arabs,  Tartars,  Texans,  or  Mexicans. 

The  second  way  in  which  the  Provisional  Government  tried  its 
hand  at  robbing  was  in  granting  letters  of  marque  and  reprisal.  It 
passed  two  acts  with  this  object,  by  the  first  of  which  (Nov.  27) 
it  was  provided  that  twenty  per  cent,  of  the  proceeds  of  the  prizes 
should  be  paid  into  the  treasury ;  by  the  second  (Nov.  30),  the 
amount  was  reduced  to  ten  per  cent.  In  thus  authorizing  indi 
viduals  to  fit  out  privateers,  it  could  plead  the  precedents  of  the 
best-established  and  most  righteous  governments. 

But  its  greatest  and  best  stroke  of  financial  policy  the  Provi 
sional  Government  reserved  for  the  last.  This  was  embodied  in  an 
act  passed  Jan.  7,  1836,  but  not  approved  of  by  the  acting  Gover 
nor  till  the  20th,  by  which  it  was  ordained  and  decreed — 

"That  the  Treasurer  shall  immediately  cause  to  be  printed  in  a  neat  form, 
and  shall  issue  in  discharge  of  claims  against  the  government  and  drafts 
on  the  treasury,  the  amount  of  one  hundred  and  fifty  thousand  dollars  in 
treasury  notes,  varying  in  specified  value  from  one  dollar  to  one  hundred 
dollars,  specifying  on  the  face  thereof  that  they  will  be  received  in  pay 
ment  for  lands  and  other  public  dues,  or  be  redeemed  with  any  moneys  in 
the  treasury  not  otherwise  appropriated/' 

Thus,  in  theory  at  least,  the  Provisional  Government  completed 
the  financial  circle  of  taxing,  borrowing,  begging,  selling,  robbing, 
and  cheating,  for  governmental  paper  money  always  degenerates 
into  an  instrument  of  fraud  and  oppression. 

For  the  officers  on  the  civil  list  the  Provisional  Government 
made  moderate  but  decent  allowances. 

To  the  army  it  was  more  liberal.  They  were  placed  on  the 
same  footing,  in  regard  to  pay  and  rations,  as  the  army  of  the 
United  States. 

The  public  lands  the  Provisional  Government  bestowed  very 
freely.  By  one  act  (Nov.  24),  it  gave  640  acres  to  each  soldier  of 
the  regular  army.  By  another,  of  Dec.  8,  640  acres  were  granted 
to  each  volunteer  who  should  enlist  for  the  war,  and  320  to  those 
who  should  enlist  for  three  months.  By  an  act  of  Dec.  12,  it  was 
provided  that  640  acres  should  be  given  to  the  representatives  of 
each  volunteer  who  should  be  killed  in  battle  or  die  in  the  service. 

This  seemed  very  liberal ;  but  the  cash  value  of  the  article 
bestowed  was  very  small.  Land,  to  him  who  has  neither  capital 
to  stock  it  nor  skill  to  cultivate  it,  is  worth  only  what  others  are 


28  THE  FISCAL  HISTORY  OP  TEXAS. 

•willing  to  give  for  it.  The  charges  of  the  Mexican  Government 
for  a  league  of  land  were  less  than  four  cents  an  acre.  The  amounts, 
then,  bestowed  by  the  Provisional  Government  were  equivalent 
only  to  cash  bounties  of  twelve  and  twenty-five  dollars. 

The  offer,  however,  drew  volunteers  from  the  United  States, 
as  they  were  more  or  less  governed  in  estimating  the  value  of  the 
bounty  by  the  price  which  land  bore  in  their  own  neighborhoods. 

After  they  got  their  titles,  they  found  they  had  to  pay  twelve 
dollars  for  surveying  640  acres,  and  one  dollar  for  the  record,  thus 
reducing  the  bounty  to  the  equivalent  of  about  twelve  dollars.  The 
result  was  that  land  was  at  a  very  low  price,  or  at  no  price. 

For  a  time,  indeed,  after  the  battle  of  San  Jacinto,  when  certi 
ficates  were  first  issued,  Nov.  1836,  land-claims  occasionally  sold 
as  high  as  $200  or  $300  for  640  acres.  But  they  subsequently 
sold  as  low  as  ten  dollars  for  640  acres,  or  at  a  fraction  more  than 
one  cent  and  a  half  an  acre. 


THE  FISCAL  HISTORY  OF  TEXAS. 


29 


CHAPTER   III. 

EXECUTIVE  PROCEEDINGS  OF  THE  PROVISIONAL  GOVERNMENT.     FIRST 
PERIOD  :    NOVEMBER  14,  1835,  TO  JANUARY  2,  1836. 

Comprehensive  proceedings  in  four  months — Pecuniary  affairs  of  the  General  Coun 
cil — A  treasurer  appointed — First  report  of  Committee  on  Finance — Donation  of 
Mr.  Hutchins,  of  Natchez — Proceedings  in  relation  to  a  United  States  Bank  note — 
Plan  for  raising  a  revenue — Gov.  Smith's  objections  to  the  way  in  which  money- 
matters  were  conducted — Small  costs  of  the  campaign — Loan  from  Mr.  Brook- 
field,  of  New  Orleans. 

"  THE  North  Americans  are  the  only  people  who,  in  defiance 
of  all  obstacles,  have  struck  the  roots  of  civilization  deep  into  the 
soil  of  Texas.  Even  as  I  trace  these  lines,  I  reflect  upon  their 
progress  with  renewed  wonder  and  admiration.  They  are,  indeed, 
the  organized  conquerors  of  the  wild,  uniting  in  themselves  the 
threefold  attributes  of  husbandmen,  lawgivers,  and  soldiers." 

Thus  speaks  Kennedy,  an  Englishman,  the  historian  of  Texas. 
And  he  does  our  countrymen  no  more  than  justice.  Let  twenty 
thousand  unquiet  spirits  roll  over  into  Tamaulipas,  Chihuhua, 
Sinaloa,  Sonora,  or  any  other  neighboring  territory,  and  they  will, 
in  two  months'  time,  do  precisely  what  was  done  by  the  Provisional 
Government  of  Texas.  They  will  substitute  the  common  for  the 
civil  law  (with  necessary  modifications);  establish  trial  by  jury 
and  the  writ  of  habeas  corpus;  Anglicize  and  Americanize  every 
thing.  It  matters  not  from  what  part  of  the  Union  you  take  them. 
The  forms  of  legislation  are  so  fatniliar  to  all  that,  in  any  twenty 
thousand,  you  will  find  men  who  can  enact  laws  as  numerous  at 
least  as  those  of  Solon  or  Lycurgus,  and,  perhaps,  quite  as  just 
and  as  wise. 

The  Provisional  Government  was  four  months  in  power,  but  in 
two  months  it  passed  all  the  laws  we  have  mentioned,  besides  many 
others  which  it  is  not  our  province  to  record.  The  next  question  is 
as  to  how  it  performed  its  executive  duties ;  and  to  answer  this,  we 
must  refer  to  the  journals. 


30  THE  FISCAL  HISTORY  OF  TEXAS. 

The  General  Council  met,  and  was  organized,  Nov.  14,  1835. 
Nov.  15,  "accounts  l  V  and  i  2'  were  presented,  and  ordered  to 
lie  on  the  table  till  to-morrow."  Thus  early  did  fiscal  concerns 
engage  its  attention. 

Nov.  16,  Mr.  Barret,  from  the  select  committee  to  whom  had 
been  committed  the  duty  to  make  extracts  from  sundry  communi 
cations  from  the  United  States  and  elsewhere,  made  a  report,  from 
which,  among  other  things,  it  appeared — 

"  That,  at  San  Augustine,  thirteen  horses  and  four  hundred  dollars  cash 
had  been  subscribed  since  Sunday  last,  which,  added  to  former  subscriptions 
for  the  support  of  the  country,  made  in  the  aggregate  a  considerable  amount; 
and  that  much  larger  sums  would  be  advanced  if  necessary ;  that  about  eight 
hundred  dollars  had  been  subscribed  at  Natchitoches,  Louisiana,  and  two 
thousand  at  Mobile,  Alabama ;  that  if  money  was  wanted,  Mr.  Thomas  F. 
McKinney  would  accept  small  drafts,  five  or  six  hundred  dollars  at  a  time, 
till  a  loan  could  be  effected  in  the  United  States ;  and  that  the  receivers  of 
public  moneys  of  the  Department  of  Nacogdoches,  having  a  considerable 
amount  of  funds  on  hand,  had  surrendered  them  to  the  Provisional  Go 
vernment,  and  they  would  be  in  a  few  days  in  the  treasury." 

All  this  was  very  encouraging,  and  on  the  same  day  a  fiscal 
committee,  consisting  of  Messrs.  Millard,  Wilson,  and  Clements, 
was  appointed  to  attend  to  these  important  matters. 

On  the  next  day,  Mr.  Barret,  from  the  Committee  on  the  Af 
fairs  of  State  and  Judiciary,  made  a'  report,  in  which  it  was  made 
a  leading  paragraph — 

"  That  the  immediate  appointment  of  a  treasurer  to  the  Provisional  Go 
vernment,  whose  duty  shall  be  clearly  defined,  is  now  devolving  upon  this 
body.  Receipts  and  disbursements  of  the  public  moneys  have  been  hitherto 
carried  on  without  system  ;  consequently,  without  any  other  responsibilities 
to  the  public  than  that  high  sense  of  moral  feeling  which  so  eminently  dis 
tinguishes  the  free  sons  of  that  country  in  revolutionary  times  from  which 
our  citizens  have  descended." 

It  was  not  till  ten  days  afterwards  that  an  ordinance  was  passed 
for  appointing  a  treasurer  ;  and  the  oath  prescribed  by  the  organic 
law  was  not  administered  to  Joshua  Fletcher,  Esq.,  Treasurer  pro 
tern.,  till  the  28th  of  November.  On  the  5th  of  December,  all  was 
made  right  by  his  being  regularly  elected  treasurer. 

Previous  to  this,  however,  on  the  18th  of  November,  the  fiscal 
committee  made  a  report ;  and  this,  as  the  first  financial  document 
of  a  government  which,  in  little  more  than  a  month  from  date,  was 
to  have  complete  control  of  a  territory  larger  than  the  kingdom  of 
France,  deserves  to  be  handed  down  to  posterity. 


THE  FISCAL  HISTORY  OF  TEXAS.  31 

"  Mr.  Millard,  from  the  Committee  on  Finance,  made  the  following  re 
port  : — 

"  Your  Committee  on  Finance,  to  whom  were  referred  the  accounts  of 
Thomas  Bray  and  Madison  M.  Stevens,  beg  leave  to  report : — 

"  That  the  accounts  so  submitted  against  the  Government  of  Texas  are, 
in  their  present  form,  unreasonable,  and  ought  not  to  be  paid. 

"  The  account  marked  '  6/  that  of  Thomas  Bray,  for  furnishing  Cole's 
company  of  wagoners  with  one  hundred  and  seven  pounds  of  bread,  at 
twenty-five  cents  per  pound,  amounting  to  twenty-six  dollars  and  seventy- 
five  cents,  should  be  reduced  to  fourteen  cents  per  pound ;  and  he  be  allowed 
fifteen  dollars  and  seventy-eight  cents  in  full  for  the  amount  of  his  account. 
And  further,  the  account  of  Madison  M.  Stevens,  for  carrying  one  express 
to  Nacogdoches,  that  he  be  allowed  compensation  for  ten  days'  service,  at 
two  dollars  and  fifty  cents  per  day,  amounting  to  twenty-five  dollars,  and 
that  the  amount  of  his  expenses  already  paid  be  deducted  from  the  same, 
leaving  a  balance  due  him  of  ten  dollars  and  fifty  cents. 

"  The  above,  in  the  opinion  of  this  committee,  would  be  paying  the 
above-named  individuals  full  compensation  for  articles  furnished  and  services 
rendered. 

HENRY  MILLARD, 

Chairman. 

CHARLES  WILSON, )  n 

J.  D.  CLEMENTS,       }  Comm>Mee. 

"  The  foregoing  report,  having  been  read,  was  ordered  to  lie  on  the 
table." 

What  powerful  influence  Messrs.  Bray  and  Stevens  brought 
to  bear  on  the  watchful  guardians  of  the  public  treasury,  we  know 
not ;  but  nearly  a  month  afterwards  the  committee  made  a  report, 
in  which  it  was  recommended  that  their  demands  should  be  paid 
in  full. 

So,  in  reports  from  the  Committee  of  Finance,  and  the  Com 
mittee  of  Public  Accounts,  eighty-four  accounts,  amounting  in  all 
to  $7,764  78,  besides  a  few  others,  the  amounts  of  which  are  not 
distinctly  stated,  appear  to  have  been  passed  and  allowed  up  to 
January  25,  1836.  Some  ten  or  more  were  rejected  for  want  of 
sufficient  vouchers ;  six  were  laid  over  for  further  consideration ; 
and  six  referred  to  the  House  for  its  special  action. 

The  following  extracts  from  the  Journal  are  characteristic  of  the 
times  : — 

"November  80.  By  leave,  General  Houston  presented  to  the  Council 
one  hundred  dollars,  a  donation  from  John  Hutchins,  of  Natchez,  Missis 
sippi,  to  the  Provisional  Government,  for  the  use  of  Texas  in  her  present 
struggle  for  liberty. 

"  Mr.  Millard  presented  the  following  resolution,  which  was  adopted 
unanimously : — 


32  THE  FISCAL  HISTORY  OF  TEXAS. 

"  Resolved,  That  the  thanks  of  the  General  Council  of  the  Provisional 
Government  of  Texas  be,  and  they  are  hereby  presented  to  John  Hutching, 
of  Natchez,  Mississippi,  for  the  interest  and  zeal  he  has  evinced  in  the 
cause  of  Texas,  and  particularly  for  his  liberal  donation  to  this  government 
of  one  hundred  dollars,  to  defray  the  expenses  of  this  government,  and  to 
assist  their  efforts,  for  the  security  and  establishment  of  their  constitutional 
liberty,  against  the  tyranny  and  oppression  of  the  government  of  the 
usurper,  Santa  Anna. 

"  Mr.  Mil  lard  moved  that  a  copy  of  the  foregoing  resolution,  signed  by 
the  President  and  Secretary,  be  forwarded  to  Mr.  Hutchins,  which  was 
agreed  to. 

"  December  1.  The  President  stated  to  the  Council  that  he  had  paid  over 
to  the  Treasurer  the  one  hundred  dollars  presented  by  John  Hutchins,  of 
Natchez,  Mississippi,  and  taken  the  Treasurer's  receipt,  which  was  ordered 
to  be  deposited  in  the  executive  office." 

This  is  the  last  event  of  any  importance  in  the  fiscal  history 
of  Texas  previous  to  the  10th  of  December,  the  day  on  which 
Cos  and  Utargechea  capitulated,  which  ended  the  campaign. 

Some  time  afterwards,  December  16,  we  find  nearly  a  page  of 
the  Journal  devoted  to  a  report  and  resolution  of  the  Committee 
of  Finance  on  a  branch  post-note  of  the  United  States  Bank  for 
one  thousand  dollars.  And  it  was  resolved  that — 

"  The  Treasurer  be  authorized  to  pass  the  said  note  to  Mr.  Thomas  Gay, 
or  any  other  person,  in  exchange  for  cash  or  smaller  notes;  and  that,  if  the 
said  note  for  one  thousand  dollars  should  prove  to  be  spurious,  the  Treasurer 
should  be  bound  to  refund  the  amount  to  Thomas  Gay,  or  whoever  shall 
have  changed  the  same,  with  interest,  at  the  rate  of  ten  per  cent.,  from  the 
time  he  may  lay  out  of  the  use  of  his  money." 

The  reader  will  be  gratified  to  learn  that  this  thousand  dollar 
bill,  the  sum  of  the  contributions  of  some  people  in  the  United 
States,  and  the  only  bank-note  that  appears  ever  to  have  reached 
the  treasury  of  Texas,  proved  to  be  genuine. 

Previous  to  this,  however,  and  even  previous  to  the  receipt  of 
the  hundred  dollars  from  Mr.  Hutchins,  of  Natchez,  namely,  on 
the  27th  of  November,  the  Committee  of  Finance  made  a  report, 
in  which,  after  dwelling  for  some  time  on  the  immense  natural 
resources  of  Texas,  greater  than  those  of  New  York,  Pennsylvania, 
Yirginia,  and  Ohio,  all  put  together,  they  proceeded  to  develop  a 
plan  for  raising  a  revenue.  The  portion  of  the  land  granted  to 
individuals  or  settlers,  they  estimated  at  ten  millions  of  acres,  a 
direct  tax  on  which  of  one  cent  an  acre  would  produce  one  hun 
dred  thousand  dollars  per  annum.  The  United  States  Govern 
ment  having,  from  the  sales  of  its  public  lands,  derived  a  revenue 


THE  FISCAL  HISTORY  OF  TEXAS.  33 

of  a  million  per  annum,  the  committee  suppose  that  Texas  may 
derive  from  this  source  a  quarter  of  a  million  a  year,  though  not 
immediately.  As  a  means  more  readily  available,  they  recom 
mend  a  tonnage  duty  of  two  dollars  and  twelve  and  a  half  cents 
a  ton,  and,  believing  the  export  of  cotton  to  amount  to  sixty 
thousand  bales,  they  suppose  "the  amount  derived  from  this 
branch  of  the  revenue  (i.  e.  the  tonnage  duties)  could  be  fairly 
estimated  at  125,000  dollars." 

"  Another  sure  and  certain  source  of  available  revenue  presents  itself 
to  the  consideration  of  your  committee,  viz.,  an  export  duty  on  cotton, 
which  it  would  not  be  deemed  high  to  place  at  one  quarter  of  a  cent  per 
pound.  The  ease  and  facility  with  which  this  duty  can  be  collected,  and 
the  near  approach  of  the  season  for  the  exportation  of  the  article,  must 
necessarily  render  this  subject  of  impost,  in  the  opinion  of  your  committee, 
the  first  in  the  list  of  available  means.  Your  committee,  therefore,  recom 
mend  a  duty  of  one  quarter  of  a  cent  per  pound  for  every  pound  of  cotton 
exported  out  of  Texas.  Assuming  the  amount  of  bales  exported  as  correct 
in  the  preceding  item  on  tonnage,  the  revenue  would  be  increased  by  this 
item  of  impost  about  60,000  dollars." 

The  committee  also  proposed  duties  of  fifteen  and  thirty  per 
cent,  on  imports,  but  offered  no  estimate  of  the  amount  they  would 
yield  to  the  treasury. 

Thus  easy  is  it  to  cipher  out  a  revenue  on  paper.  But  as  our 
concern  is  not  now  with  the  revenues  of  Texas  in  posse,  but  in  esse, 
we  rmust  return  to  the  consideration  of  the  management  of  the 
means  which  the  Provisional  Government  actually  possessed,  con 
sisting  of  a  few  thousand  dollars  (somewhere  between  $3,000  and 
$10,000),  found  in  the  coffers  of  the  Mexican  Government  it  had 
superseded,  and  the  contributions  of  its  own  citizens,  and  those  of 
the  United  States. 

For  a  short  time,  all  orders  on  the  Treasurer,  after  having  been 
passed  by  the  General  Council,  were  signed  by  the  Governor  and 
Secretary;  but,  on  the  2d  of  December,  an  ordinance  was  passed 
making  the  signature  of  the  chairman  of  the  Committee  of  Finance 
all-sufficient. 

This  did  not  please  Governor  Smith,  who  was  something  of  a 
precisian. 

"  I  object  to  the  bill  for  the  following  reasons:  First.  The  Committee  on 
Finance,  with  whom  the  whole  discretion  of  appropriating  money  and  draft 
ing  on  the  treasury  is  vested,  is,  like  all  other  committees  belonging  to 
your  body,  liable  to  change  and  shift  its  members;  as  such,  indiscreet  appro 
priations  might  be  made,  and  money  drawn  for  improper  uses.  A  bare 
3 


34:  THE  FISCAL  HISTOHY  OF  TEXAS. 

report  to  the  Council  of  what  has  been  done,  in  order  that  it  be  noted  in 
your  journals,  would  afford  no  check  to  the  acts  of  the  committee,  because 
the  appropriations  and  drafts  on  the  treasury  would  be  made  prior  to  the 
report  of  the  committee;  and,  as  such,  they  would  be  left  without  check 
or  corrective. 

"  Secondly.  I  consider  that  no  appropriation  of  money  should  be  made, 
except  by  law;  that  no  committee,  or  separate  authority,  should  be  privileged 
to  make  appropriations,  or  draw  money  from  the  treasury,  without  the 
necessary  forms  being  complied  with.  Acting  without  the  proper  function 
aries  of  secretary,  comptroller,  &c.,  it  would  be  well  to  incorporate  in  our 
plan  as  many  checks  and  balances  as  would  be  consistent,  without  producing 
complexity." 

Governor  Smith  was  clearly  right.  According  to  the  established 
principles  of  American  polity,  the  legislature  should  make  appro 
priations  ;  a  board,  or  an  officer,  specially  appointed  for  the  pur 
pose,  should  audit  all  claims ;  and  the  treasurer  should  pay  them. 
The  General  Council  was  betrayed  into  some  improprieties  by  its 
acting  in  both  a  legislative  and  executive  capacity,  and,  on  the 
12th  of  December,  by  a  vote  of  twelve  to  two,  it  passed  the  bill 
in  defiance  of  the  Governor's  veto. 

Struck,  however,  as  it  would  seem,  with  the  force  of  the  Gover 
nor's  observations,  they  previously,  on  the  llth  of  December,  re 
solved — 

"  That  there  should  be  appointed  by  the  President  a  Standing  Committee 
of  Public  Accounts,  to  consist  of  one  member  from  each  of  the  principal 
standing  committees,  except  the  Committee  of  Finance,  and  that  it  should 
be  the  duty  of  said  committee  to  receive,  audit,  and  register  said  accounts, 
entering  in  a  book,  to  be  purchased  for  that  purpose,  the  title  and  amount 
of  said  accounts,  in  such  a  manner  as  to  show  their  situation  at  any  particular 
time,  whether  passed,  rejected,  or  under  consideration,  and  report  upon  the 
same  to  the  Council,  as  often  as  twice  every  week,  say  Wednesday  and  Satur 
day." 

Thus,  everything  was  not  left  to  the  Finance  Committee,  and, 
while  one  committee  audited  the  accounts,  another  committee  (such 
accounts  being  first  approved  by  the  Council)  ordered  them  to  be 
paid. 

Soon  afterwards,  a  regular  system  of  account-keeping  was  intro 
duced,  by  the  appointment  of  an  auditor  and  comptroller. 

All  this  may  seem  like  very  trifling  in  a  government,  the  imme 
diate  means  of  which  were  so  insignificant  as  were  those  of  the  Pro 
visional  Government  of  Texas.  But  all  that  a  government  with 
an  empty  treasury  can  do,  is  to  promptly  audit  accounts,  carefully 
register  them,  reject  such  as  are  not  supported  by  sufficient  vouchers, 


THE  FISCAL  HISTORY  OF  TEXAS.  35 

and  give  to  creditors,  whose  claims  are  justly  founded,  some  ac- 
knowled  foment  of  the  same.  All  this  did  the  Provisional  Govern- 

o 

ment  of  Texas;  and  some  of  its  principles  of  polity,  especially  that 
of  promptly  auditing  accounts,  might  be  adopted  with  advantage 
by  the  United  States  Government,  and  perhaps  by  some  of  the 
States. 

The  actual  doings,  in  a  financial  way,  of  the  Provisional  Govern 
ment  contrast  most  ludicrously  with  its  magnificent  enactments  for 
raising  revenue  and  negotiating  loans  ;  and  yet  be  it  remembered 
that,  during  the  period  specially  treated  of  in  this  chapter,  a  region 
twice  as  large  as  Great  Britain  and  Ireland  was  cleared  of  its  Mexi 
can  foes. 

How  was  this  effected?  The  pecuniary  means  of  the  govern 
ment  were,  as  we  have  seen,  very  small.  But  everybody  fought,  and 
everybody  contributed.  What  was  wanted  for  the  use  of  the 
army  was,  according  to  the  custom  of  war,  forcibly  seized,  if  it 
could  not  otherwise  be  got  possession  of;  but  the  rule  was  always 
to  give  an  acknowledgment,  making  the  government  responsible  for 
the  value  of  what  was  thus  taken. 

"  Deficient  in  all  the  resources  requisite  for  war,  except  moral 
energy  and  courage,  the  colonists  themselves  contributed,  from 
their  private  means,  whatever  was  calculated  to  be  of  use  to  the 
troops.  Leaden  water-pipes  and  clock-weights  were  melted  down 
for  ammunition,  and  even  the  women  cheerfully  assisted  in  mould 
ing  bullets  and  making  cartridges." — Kennedy,  vol.  ii.  p.  115. 

The  actual  cost  of  the  campaign  we  have  been  curious  to  know, 
but  cannot  tell.  Others  appear  to  have  had  a  like  curiosity,  for 
the  first  Congress  under  the  Republic  called  for  a  report  of  the 
transactions  of  the  treasury  under  the  Provisional  Government, 
but  the  desired  report  does  not  appear  to  have  been  made.  Subse 
quently  to  this,  the  Congress  of  Texas — in  humble  imitation  of  the 
Congress  of  the  United  States — keeping  its  public  records  in 
combustible  buildings,  suffered  the  loss  of  part  of  those  in  the 
Treasurer's  office  from  fire.  The  world  must,  therefore,  for  the 
present,  at  least,  be  content  with  such  account  of  receipts  and 
expenditures,  under  the  Consultation  and  under  the  Provisional 
Government,  up  to  January  2,  1836,  as  we  have  been  able  to 
gather  from  the  journals. 

Before  concluding  the  history  of  this  year,  we  ought  to  state 


36  THE  FISCAL  HISTORY  OF  TEXAS. 

that  a  loan  was  effected;  not  a  very  large  one,  indeed,  but  yet 
such  as  was  deemed  worthy  of  the  following  insertion  in  the 
journals: — 

"  December  29.  Mr.  Harris  presented  to  the  House  the  receipts  of  E. 
Hall,  our  agent  at  New  Orleans,  for  eleven  hundred  dollars — received  of 
William  Brookfield,  money  loaned  for  the  use  of  Texas,  to  purchase  arms, 
ammunition,  &c. 

"  On  motion  of  Mr.  Roy  all, 

"  Resolved — That  the  thanks  of  the  General  Council  be  presented  to  Mr. 
Brookfield  for  his  generous  and  patriotic  conduct  in  loaning  eleven  hun 
dred  dollars  to  E.  Hall,  our  agent  at  New  Orleans,  for  the  purpose  of  pro 
curing  and  forwarding  arms,  ammunition,  &c.,  and  that  the  receipt  of  Mr. 
Hall  for  the  same  be  entered  on  the  journals  of  the  Council,  the  original  to 
remain  on  file  among  the  papers  of  the  Council,  and  a  copy  to  be  given  to 
Mr.  Brookfield,  as  evidence  of  his  claim,  to  be  adjusted  at  some  future 
period. 

i '  The  following  is  a  copy  of  the  receipt : — 

"Received,  New  Orleans,  December  7,  1835,  from  Mr.  William  Brook- 
field,  eleven  hundred  dollars  as  a  loan  for  the  service  of  Texas. 

"$1100.  EDWARD  HALL, 

"Agent for  the  Government. 

"  Approved  by  F.  Thorn  and  A.  C.  Allen." 

Thus  grateful  were  the  Texans,  in  those  times,  for  the  smallest 
•aid  afforded  them,  and  thus  particular  were  they  in  acknowledging 
the  obligation. 


THE  FISCAL  HISTORY  OF  TEXAS.  37 


CHAPTER    IV. 

PROCEEDINGS  UNDER  THE  PROVISIONAL  GOVERNMENT  IN  RELATION 
TO  THE  PUBLIC  LANDS. 

The  Commissioner  of  the  Nashville  Colony  arraigned  for  contumacy — Great  diffi 
culties  with  the  land-speculators  in  the  Department  of  Nacogdoches — Indig 
nation  of  Governor  Smith — Determined  action  of  the  Council. 

THESE  proceedings  were  of  so  much  importance  that  we  must 
devote  to  them  a  distinct  chapter. 

It  has  already  been  mentioned  that  the  order  to  close  the  land- 
offices  and  to  stop  all  surveys  had  given  dissatisfaction  in  some 
quarters. 

December  1,  Mr.  Barret,  from  a  select  committee  to  whom  the 
subject  had  been  referred,  made  the  following  report: — 

"  Your  committee,  to  whom  was  referred  the  report  of  the  commissioners 
appointed  for  securing  the  papers  and  documents  of  the  several  land-offices 
of  the  Department  of  the  Brazos,  agreeably  to  the  14th  section  of  the  Pro 
visional  Government  of  Texas,  passed  by  the  Consultation  of  the  chosen 
delegates  of  all  Texas,  in  general  convention  assembled,  on  the  13th  of 
November,  1835,  report: — 

"  That  they  have  duly  considered  the  conduct  of  Wm.  H.  Steele,  the 
commissioner  of  the  colony  of  the  Nashville  Company,  in  refusing  to  recog 
nize  the  authority  of  the  commissioners,  &c.,  and  condemning  the  proceed 
ings  and  orders  of  the  delegates  of  the  people  of  Texas,  assembled  in  general 
convention,  and  in  refusing  to  obey,  and  treating  with  contempt  the  man 
dates  of  the  Provisional  Government,  organized  by  the  people's  representa 
tives  ;  and  are  unanimous  in  advising  that  the  General  Council  should 
take  prompt  and  efficient  means  to  enforce  obedience  to  the  laws  of  the 
country.  To  this  end  your  committee  advise  the  adoption  of  the  following 
ordinance." 

So  indignant  was  the  Council,  that  its  common  rule  was  sus 
pended  ;  the  ordinance  read  a  first,  second,  and  third  time ;  and 
passed  immediately.  In  the  body  of  it  was  distinctly  set  forth 
"the  contumely  and  contempt"  with  which  Wm.  H.  Steele  had 
treated  the  people's  representatives ;  and  the  Governor  was  re 
quested  to  issue  a  special  commission,  "  with  a  writ  of  assistance,  to 
command,  in  the  name  of  the  people,  all  officers,  whether  civil  or 


THE  FISCAL  HISTORY  OF  TEXAS. 

military,  and  all  good  citizens,  to  give  aid,  and  be  aiding  and  assist 
ing"  in  bringing  the  contumacious  Wm.  II.  Steele  before  the 
General  Council. 

As  this  was  a  point  on  which  the  Governor  and  Council  were 
agreed,  any  attempt  at  resistance  on  the  part  of  Mr.  Steele 
would  have  been  extreme  folly.  But  he  had  no  disposition  to 
resist.  On  the  15th  of  December,  as  appears  from  the  Jour 
nal,  he  came  voluntarily  before  the  Council,  and  stated 

"  That  the  warrant  to  arrest  him  had  not  been  served  upon  him,  but  hear 
ing  that  one  had  been  issued,  he  appeared  for  the  purpose  of  explaining 
the  reasons  of  his  refusal.  That  the  citizens  of  Viesca  did  not  understand 
that  their  delegates  were  clothed  with  conventional  powers,  but  that  they 
generally  approved  of  the  doings  of  the  Convention,  so  far  as  they  were  in 
formed  of  them.  That  he  lived  at  a  great  distance  from  the  seat  of  govern 
ment,  from  which  communications  were  very  uncertain.  That  the  refusal  was 
made  through  misunderstanding,  and  in  the  moment  of  excitement,  and  not 
from  any  disrespect  to  the  government  or  its  authorities." 

On  motion  of  Mr.  Royall,  the  Council  resolved  that  it  was  satis 
fied  with  this  explanation ;  and  not  long  afterwards  (December 
27),  Mr.  Steele  gave  unquestionable  proof  of  his  patriotism  by 
making  a  conditional  purchase  from  them  of  one  hundred  and  fifty- 
three  sheets  of  stamped  paper  (see  printed  Journal,  page  229) — no 
trifling  aid  to  the  treasury  in  that  time  of  trouble. 

Ear  greater  difficulties  had  the  Council  to  contend  with  in  the 
extensive  Department  of  Nacogdoches,  where  the  people  generally 
seemed  to  have  little  disposition  to  obey  the  order  to  close  the 
land-offices  and  stop  the  surveys.  This  appears  from  the  Report 
of  the  Committee  on  State  Aifairs  (December  4),  in  which,  after 
giving  a  view  of  the  reasons  that  led  to  the  issue  of  the  order,  and 
of  the  authority  by  which  it  had  been  issued,  they  conclude  with 
expressing  a  belief  that  "  the  good  citizens  of  the  Nacogdoches 
Department,  in  view  of  all  these  facts  and  necessities,  will  sub 
mit,  and  yield  obedience,  especially  when  convinced  that  resistance 
will  not  only  be  vain,  but  subject  them  to  heavy  penalties." 

But  "  the  good  citizens"  of  the  Department  of  Nacogdoches 
were  not  so  complaisant.  There  was  hardly  one  of  them,  perhaps, 
who  had  not  at  that  time  more  land  than  he  could  make  a  proper 
use  of.  But  they  were  far  removed  from  the  seat  of  war ;  and 
while  their  brethren  of  western  Texas  had  all  the  lively  excitement 
of  fighting  the  Mexicans,  they  could  not  see  why  they  might  not 


THE  FISCAL  HISTORY  OF  TEXAS.  39 

divert  themselves  with  the  minor   excitement    of  land-specula 
tions. 

The  next  notice  of  this  subject  which  we  find  in  the  Journal 
is  contained  in  a  letter  of  Governor  Smith,  dated  December  7 : — 

"  I  hasten  to  lay  before  your  honorable  body  an  official  communication 
from  Dr.  S.  H.  Everitt,  one  of  your  commissioners  appointed  to  take  charge 
of  the  archives  of  the  land-offices  of  the  Department  of  Nacogdoches,  &c. 
You  will  see  by  his  communication  what  has  been  done,  and  will,  I  hope, 
take  such  immediate  steps  as  will  be  calculated  to  carry  the  decree  into 
effect  with  the  least  possible  delay.  I  make  this  a  separate  communication, 
touching  no  other  subject-matter,  in  order  that  it  receive  the  prompt  and 
undivided  attention  of  your  body." 

Dr.  Everitt's  letter  not  being  printed  in  connection  with  the 
Governor's  message,  we  are  left  in  ignorance  of  the  exact  doings 
that  called  for  the  prompt  and  undivided  attention  of  the  Council. 
But,  on  the  next  day,  December  8,  the  Committee  on  State  Affairs 
made  a  report,  in  which  they  reaffirm  what  had  been  stated  in 
their  report  of  the  4th,  and  then  proceed  as  follows: — 

"  Therefore,  that  this  House  cannot  legally  pass  any  ordinance  granting 
the  power  of  making  titles  in  any  way  until  the  said  14th  article  is  com 
plied  with,  at  least  so  far  as  that  the  papers  and  documents  are  under  the 
control  of  the  officers  of  the  Provisional  Government.  When  this  shall 
have  been  effected,  your  committee  have  no  further  hesitation  in  advising 
that  the  several  legal  commissioners  of  each  land-office,  or  some  other  per 
son  specially  appointed,  be  authorized  to  proceed  in  completing  all  titles  to 
land  made  for  settlers  on  surveys,  returned  before  the  passage  of  the  said 
14th  section.  But  in  doing  this,  all  proper  guarantees  against  injustice  or 
fraud  should  be  carefully  incorporated  in  the  decree  for  such  purpose. 

"In  the  mean  time, your  committee  have  confidence  in  assuring  this  Coun 
cil,  and  the  people  at  large,  that  neither  the  orders  of  the  Convention  nor 
decrees  of  the  Provisional  Government  have  any  other  object  or  effect  than 
of  securing  an  equal  and  fair  opportunity  for  all  our  citizens  to  obtain  their 
landed  rights;  and  although  the  time  of  perfecting  titles  may  be  extended, 
no  acquired  right  or  privilege  either  is  or  can  be  affected.  The  right  exists 
unimpaired,  while  the  bare  legal  form  remains  to  be  executed." 

Here  let  us  stop  to  do  justice  to  the  Texans.  However  dark 
their  prospects,  or  however  desperate  their  condition,  they  never 
seem  to  have  lost  sight  of  the  admirable  advantages  their  country 
affords  for  land-speculations.  This  is  a  credit  due  to  them  without 
distinction  of  party,  and  to  the  Western  Texans  as  well  as  the 
Eastern.  All  the  Provisional  Government  wanted  was  that  "  all 
should  start  fair,"  and  herein,  we  think,  the  Provisional  Govern 
ment  was  decidedly  right. 


40  THE  FISCAL  HISTORY  OF  TEXAS. 

The  next  record  in  the  Journal  relating  to  the  troubles  in  the 
Department  of  Nacogdoches,  is  contained  in  a  letter  from  the  Go 
vernor,  dated  December  26.  Some  extracts  follow : — 

"  Mr.  Forbes  incloses  back  a  commission  which  had  been  previously  sent 
to  him.  *  *  *  And  furthermore  says  that,  owing  to  the  com 
bined  and  active  opposition  of  some  six  or  eight  speculators,  sustained  by 
individuals  from  the  States,  who  employ  them  to  engross  the  lands  that  are 
properly  the  public  domain,  the  intentions  of  the  government,  and  its  acts 
relating  to  the  public  lands,  and  even  its  judicial  acts,  have  been  delayed 
and  interrupted,  greatly  to  the  injury  of  the  public. 

*  *  *  *  #  *  * 

"  Your  honorable  body  will  plainly  see,  from  the  foregoing,  the  situation 
of  the  land-offices  to  the  east,  and  that  the  acts  of  the  Convention  have  not 
been  carried  into  effect;  nor  does  it  appear  that  they  can  be,  short  of  a  mili 
tary  force ;  and  whether  such  a  course  would  be  calculated  to  produce  any 
salutary  effect,  is  for  your  honorable  body  to  determine.  That  some  kind  of 
effort  should  be  made  by  us  to  sustain  and  protect  the  public  interest  must 
be  obvious  to  all.  While  we  are  contending  with  a  powerful  foe,  even  for 
our  very  existence,  that  we  should  find  men  among  us  capable  of  committing 
piracies  both  on  sea  and  land,  is,  I  must  admit,  rather  discouraging;  but 
permit  me  to  say  to  you  that  every  opposition  has  a  powerful  tendency  to 
stimulate  me  to  greater  exertion,  and  I  hope  will  have  the  same  effect  on 
your  honorable  body.  Opposition,  strong,  vigilant,  and  persevering,  by  me 
was  anticipated ;  hence  I  am  never  taken  by  surprise,  or  deceived  in  the  per 
sons  who  stir  it  up.  They  never  consider  the  public  good,  but  seek  their 
own  private  interests;  hence  they  are  ever  vigilant  and  on  the  wing.  It  is 
made  our  duty  to  guard  and  protect  that  which  they  wish  to  destroy.  They 
dread  organization  as  a  great  evil,  because  honest  investigation  follows  as  a 
matter  of  course,  which  they  dread,  preferring  darkness  to  light,  because 
their  deeds  have  been  evil. 

"  These  men  have  their  unprincipled  hirelings  and  satellites  to  operate, 
and  endeavor  to  keep  themselves  behind  the  screen.  They  may  not  be 
generally  known  to  your  body,  and  as  such  will,  no  doubt,  often  attempt 
to  practise  fraud  upon  you  by  their  insinuating  approaches.  Me,  they  sel 
dom  approach.  They  may  overpower,  but  never  can  deceive." 

In  a  report,  dated  December  28,  a  committee  of  the  Council 
took  occasion  to  inform  the  Governor  that  they  were  as  little 
liable  to  be  imposed  on  by  these  men  as  he  was  himself.  This  will 
appear  from  the  following  extracts : — 

"  Your  Committee  on  State  and  Judiciary,  to  whom  was  referred  the 
Governor's  message  of  the  26th  instant,  and  various  letters  and  documents 
from  Nacogdoches,  respectfully  report — 

"  That,  from  the  general  information  contained  in  the  Governor's  mes 
sage,  and  letters  from  S.  H.  Everitt,  Esq.,  the  only  acting  commissioner 
under  the  14th  section  of  the  organic  law,  in  the  Department  of  Na 
cogdoches,  and  the  other  documents  referred,  your  committee  are  unwill 
ingly  convinced  of  the  prevalence  of  a  spirit  of  disorganization  in  some 


THE  FISCAL  HISTORY  OF  TEXAS.  41 

parts  of  that  country,  which,  in  a  more  limited  degree,  also,  exists  else 
where  in  Texas;  and  that  this  spirit  is  the  natural  consequence  of  the 
revolutionary  state  of  our  country,  a  change  in  its  form  of  government,  a 
mixed  population  coming  from  various  parts  of  the  world,  strangers  to  each 
other,  and  unassimilated  in  character  or  habit.  But  your  committee  are  well 
convinced,  from  their  knowledge  of  the  Anglo-American  character,  which 
constitutes  the  greater  part  of  Texas  citizens,  that  the  intelligence  and  moral 
feeling  of  the  mass  of  the  people,  ever  reflective,  would  have,  ere  this,  led 
them  to  consistency  of  conduct  and  respect  for  the  existing  authorities, 
created  by  their  own  representatives  from  the  present  necessity,  however 
crude  in  organization,  yet  giving  order  and  affording  protection  for  the  time, 
were  it  not  for  ambitious  demagogues,  designing  and  sinister  speculators, 
equally  destitute  of  patriotism  and  regardless  of  the  people's  rights,  and 
every  other  consideration  that  obstructs  the  gratification  of  their  own  private 
ends.  Such  men,  even  in  a  settled  and  well-regulated  community,  often 
distract  the  minds  of  the  honest  and  undesigning,  and  disturb  the  harmony  of 
society,  until,  by  a  severe  rebuke  from  the  people  themselves,  or  by  the 
strong  arm  of  the  law,  their  career  of  wickedness  is  checked,  and  they 
become  objects  of  contempt  and  infamy.  That  the  good  people  are  troubled 
by  such  men  among  them,  is  by  no  means  unexpected.  To  guard  against 
the  consequences  of  their  evil  machinations  is  our  first  duty,  and  involving 
immense  responsibility  upon  all  the  officers  of  the  Provisional  Government ; 
and  we  cannot  hope  to  effect  this,  unless  union,  prudence,  justice,  and 
firmness,  are  the  governing  motives  of  all  our  conduct  throughout  all  our 
councils. 

"  Your  committee  most  cordially  respond  to  the  principles  of  action  re 
commended  to  this  Council,  as  necessary  to  the  very  existence  of  order  and 
respect  for  the  laws ;  and  are  fully  aware  of  the  magnitude  of  the  evil,  and 
deep  injury  to  the  country  consequent  upon  the  intrigues,  frauds,  and  un 
controlled  ravages  of  the  daring  and  unprincipled  land-speculators  who  infest 
the  country,  agitating  the  public  mind  with  base  falsehoods,  and  keeping  up 
discord,  distrust,  and  disrepute,  to  their  own  and  only  source  of  present 
protection,  and  last  barrier  against  anarchy  and  internal  war,  the  Provisional 
Government  of  Texas.  Your  committee  confidently  assure  his  excellency 
that  the  General  Council  know  these  men  too  well  to  be  deceived  by  them, 
and  while  acting  under  the  influence  of  principles  hitherto  governing  the 
conduct  of  this  body,  feel  that  the  virtue  and  intelligence  of  the  people 
will  sustain  their  acts." 

The  report  was  adopted.  On  the  31st  of  December,  an  address 
was  voted  to  the  people,  giving  the  reasons  for  closing  the  land- 
offices.  New  commissioners  were  appointed  to  take  possession 
of  the  archives  of  the  land-offices  in  the  Department  of  Nacog- 
doches,  and  the  land-speculators'  rebellion  was  subdued  without 
bloodshed. 


42  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    V. 

EXECUTIVE  PROCEEDINGS  UNDER  THE  PROVISIONAL  GOVERNMENT. 
SECOND  PERIOD:  JANUARY  2  TO  MARCH  13,  1836. 

Condition  of  affairs  at  the  beginning  of  1836 — Two  vessels  of  war  procured — Pros 
pect  of  loans  in  New  Orleans — Conflicts  of  Governor  Smith  and  the  Council — 
Mr.  Smith  superseded,  and  Mr.  Robinson  made  acting  governor. 

WITH  the  beginning  of  1836  commenced  a  new  era  in  the  fiscal 
history  of  Texas.  Its  bills  for  raising  a  revenue  and  negotiating 
loans  had  been  passed,  and  its  commissioners  were  on  the  way 
to  the  United  States,  or  had  actually  arrived  there.  Governor 
Smith's  rigid  notions  of  correctness  were  no  longer  shocked  by  a 
single  committee  appropriating  money,  auditing  claims,  and  draw 
ing  drafts  on  the  treasury.  Texas  had  now  her  auditor  and  con 
troller;  and,  so  far  as  regards  account-keeping,  everything  was  as 
regularly  conducted  as  in  the  best-established  g  dynasties.  It  is 
true  that  there  was  no  money  in  the  treasury,  and  claims  were 
daily  accumulating  against  it;  but  this  is  the  natural  order  of 
things  in  revolutionary  periods. 

Nor  did  all  the  legislative  acts  of  the  General  Council  prove 
ineffective.  Early  in  January,  two  schooners,  the  "  William  Rob- 
bins,"  (afterwards  the  "Liberty,")  and  the  "Invincible,"  were 
purchased  from  McKinney  and  Williams;  but  whether  they  had 
or  had  not  the  formidable  armament  of  six  and  twelve  guns, 
provided  for  in  the  "  Ordinance  for  Establishing  a  Navy,"  is  a 
point  on  which  history  is  silent. 

"  Communications,"  says  Kennedy,  "  were  received,  in  the  be 
ginning  of  January,  from  Stephen  Austin,  who  was  then  at  New 
Orleans,  where  he  had  obtained  a  loan  for  200,000  dollars,  and 
expected  to  procure  another  for  40,000  or  50,000  dollars.'' 

The  whole  amount  was  not  realized,  as  we  shall  hereafter  have 
occasion  to  show.  No  notice  of  it  appears  on  the  Journal  of  the 
Council,  but  there  is  no  doubt  that  the  news  was  received,  and  it 
was  very  encouraging. 


THE  FISCAL  HISTORY  OF  TEXAS.  43 

That  a  nation  of  twenty  thousand  should  successfully  contend 
with  a  nation  of  eight  or  ten  millions,  is  certainly  a  remarkable 
event  in  this  world's  history.  Some  have  attributed  it  to  the 
factions  which  existed  among  the  Mexicans,  and  which  prevented 
their  bringing  all  their  forces  to  bear  on  the  revolted  province. 
No  doubt  this  had  its  effect.  But  the  Texans  also  had  their 
factions,  as  is  evident  from  what  we  have  already  recorded,  and 
the  difference  in  the  character  of  the  two  nations  is  shown  by  the 
fact  that  the  factions  among  the  Texans,  violent  as  they  were, 
did  not  prevent  their  making  an  effectual  resistance  to  the  com 
mon  enemy. 

From  the  beginning,  there  appears  to  have  been  little  harmony 
between  Governor  Smith  and  the  Council.  He  had  a  due  sense 
of  his  dignity,  as  chief  magistrate  of  a  country  twice  as  large  as 
Great  Britain  and  Ireland,  and  judged  of  his  powers  by  analogy 
with  those  of  the  President  of  the  United  States.  He  claimed 
the  right  of  making  appointments  to  office.  The  Council  con 
tended  that  it  was  his  duty  to  commission  whomsoever  they  might 
appoint.  They  passed  bills,  and  he  vetoed  them ;  and  they,  by 
constitutional  majorities,  passed  the  bills  again  in  defiance  of  the 
vetoes.  He  was  a  precisian  in  treasury  matters ;  they  were 
somewhat  latitudinarian. 

They  differed  also  on  points  of  policy.  The  Mexican  revolu 
tionist,  General  Mexia,  had  planned  a  descent  on  Tampico,  and 
some  of  the  Texans  were  for  making  an  attack  on  Matamoras. 
Both  of  these  projects  had  the  sanction  of  a  part,  if  not  of  the 
majority  of  the  Council,  and  both  were  pointedly  disapproved  of 
by  the  Governor ;  the  last,  as  subsequently  appeared,  from  his 
having  a  private  plot  of  his  own  for  capturing  that  city  of  the 
Mexicans. 

On  returning  to  the  Council  a  bill  they  had  passed,  "  author 
izing  persons  to  be  appointed  to  make  provisions  for  General 
Mexia,"  he  said  :— 

"  I  have  no  confidence  in  General  Mexia' s  co-operating  in  our  favor. 
That  his  intention  is  to  make  a  descent  on  the  seaports  west  of  us,  for 
the  purpose  of  robbing,  to  recuperate  his  own  desperate  fortune,  I  have 
no  doubt,  but  can  see  no  possible  advantage  it  would  be  to  Texas.  What 
his  designs  or  intentions  are,  I  have  no  right  to  know,  but  really  think 
it  would  be  unwise  to  run  this  government  to  the  expense  necessary  to  fit 
him  out  without  having  any  guarantee  or  control  over  him  or  his  conduct. 


44  THE  FISCAL  HISTOKY  OF  TEXAS. 

Furthermore,  as  the  bill  runs,  it  would  seem  that  the  outfit  would  be  made 
before  this  government  would  be  advised  of  his  plans.  Besides,  I  consider 
it  bad  policy  to  fit  out  or  trust  Mexicans  in  any  matter  connected  with  our 
government,  as  I  am  well  satisfied  that  we  will  in  the  end  find  them  inimi 
cal  and  treacherous.  For  these,  and  many  other  reasons  not  enumerated, 
I  cannot  sign  the  bill." 

This  was  December  9 ;  and,  on  the  next  day,  Mr.  Harris  pre 
sented  the  following  resolution,  which  was  adopted : — 

"  Whereas,  the  Provisional  Government  of  Texas  have  received  infor 
mation,  of  which  there  is  no  doubt,  that  the  enemy  have  large  reinforce 
ments  on  the  road  to  our  frontiers,  with  whom  there  are  forty  thousand  dol 
lars  in  money,  and  if  the  same  is  not  cut  off  or  prevented  from  uniting 
with  the  force  now  at  Bexar,  our  small  but  patriotic  army  will  be  com 
pelled  to  retire,  being  overpowered  by  four  times  their  number :  Therefore 
be  it  resolved,  by  the.  General  Council  of  the  Provisional  Government  of 
Texas,  That  General  Mexia  be,  and  he  is  hereby  invited,  together  with  the 
brave  officers  and  men  under  his  command,  to  repair  immediately  to  Bexar 
by  the  way  of  Goliad,  and  there  co-operate  with  the  volunteer  army  of  the 
people. 

"  Resolved,  That  an  express  be  dispatched  immediately  to  General  Mexia, 
with  a  copy  of  this  resolution." 

Colonel  Powers  tendered  his  services  to  repair  immediately  to 
Velasco,  or  any  other  point,  to  wait  on  General  Mexia ;  but  the 
Mexican  declined  co-operating,  and  Bexar  was  captured  by  the 
Texans  without  his  aid  or  assistance. 

In  few  things,  except  hatred  of  the  Nacogdoches  land-specu 
lators,  do  the  Governor  and  Council  appear  to  have  been  agreed ; 
but  they  did  not  come  to  an  open  rupture  till  January  9,  1836. 
Then  Governor  Smith  sent  them  a  message,  which,  for  peculiarity 
of  diction,  is  unmatched  by  any  North  American  state  paper, 
though  it  is  hardly  equal  to  some  of  the  effusions  of  that  great 
European  orator,  Daniel  O'Connel. 

We  give  some  extracts  from  it,  premising  that  the  contemplated 
expeditions  against  Tampico  and  Matamoras  were  what  had  spe 
cially  excited  the  Governor's  wrath,  the  more  so  as  they  had  drawn 
away  part  of  the  forces  necessary  for  the  defence  of  the  important 
post  of  Bexar. 

"To  the  Honorable  the  President  and  Members  of  the  General  Council : — 
"  GENTLEMEN  :  I  herewith  transmit  to  your  body  the  returns  and  cor 
respondence  of  Colonel  Neill,  Lieutenant-Colonel  Commandant  of  the  post 
at  Bexar. 

"  You  will  in  that  correspondence  find  the  situation  of  that  garrison. 
You  will  there  find  a  detail  of  facts  calculated  to  call  forth  the  indignant 


THE  FISCAL  HISTORY  OF  TEXAS.  45 

feelings  of  every  honest  man.  Can  your  body  say  that  they  have  not  been 
cognizant  of,  and  connived  at  this  predatory  expedition  ?  Are  you  not 
daily  holding  conference  and  planning  co-operation  both  by  sea  and  land  ? 
Acts  speak  louder  than  words;  they  are  now  before  me,  authorizing  a  ge 
neralissimo,  with  plenary  powers,  to  plan  expeditions  on  the  faith,  the 
credit,  and  I  may  justly  say  the  ruin,  of  the  country.  You  urge  me  by 
resolutions  to  make  appointments,  fit  out  vessels  as  government  vessels, 
registering  them  as  such,  appointing  landsmen  to  command  a  naval  ex 
pedition,  by  making  representations  urgent  in  their  nature,  and  for  what  ? 
I  see  no  reason,  but  to  carry  into  effect,  by  the  hurried  and  improvident  acts 
of  my  department,  the  views  of  your  favorite  object,  by  getting  my  sanction 
to  an  act  disorganizing  in  its  nature,  and  ruinous  in.  its  effects.  Instead  of 
acting  as  becomes  the  counsellors  and  guardians  of  a  free  people,  you  re 
solve  yourselves  into  low,  intriguing,  caucussing  parties ;  pass  resolutions 
without  a  quorum,  predicated  on  false  premises ;  and  endeavor  to  ruin  the 
country  by  countenancing,  aiding,  and  abetting  marauding  parties ;  and  if 
you  could  only  deceive  me  enough,  you  would  join  with  it  a  piratical  co 
operation.  You  have  acted  in  bad  faith,  and  seem  determined  by  your 
acts  to  destroy  the  very  constitution  which  you  are  pledged  and  sworn  to 
support.  I  have  been  placed  on  the  political  watch-tower.  I  feel  the 
weight  of  responsibility  devolving  upon  me,  and  I  confidently  hope  I  will 
be  able  to  prove  a  faithful  sentinel.  You  have  also  been  posted  as  sen 
tinels  ;  but  you  have  permitted  the  enemy  to  cross  the  lines,  and,  Mexican- 
like,  you  are  ready  to  sacrifice  your  country  at  the  shrine  of  plunder.  Mr. 
President,  I  speak  collectively,  as  you  all  form  one  whole,  though  at  the 
same  time  I  do  not  mean  all.  I  know  you  have  honest  men  there,  and  of 
sterling  worth  and  integrity;  but  you  have  Judas  in  the  camp — corruption, 
base  corruption,  has  crept  into  your  councils — men  who,  if  possible,  would 
deceive  their  God. 

"  Notwithstanding  their  deep-laid  plans  and  intrigues,  I  have  not  been 
asleep;  they  have  long  been  anticipated,  forestalled,  and  counteracted. 
They  will  find  themselves  circumvented  in  every  tack.  I  am  now  tired  of 
watching  scoundrels  abroad  and  scoundrels  at  home,  and  as  such  I  am  now 
prepared  to  drop  the  curtain.  ****** 

"Look  around  upon  your  flock:  your  discernment  will  easily  detect  the 
scoundrels.  The  complaint:  contraction  of  the  eyes;  the  gape  of  the  mouth; 
the  vacant  stare;  the  hung  head;  the  restless,  fidgety  disposition;  the 
sneaking,  sycophantic  look ;  a  natural  meanness  of  countenance ;  an  un 
guarded  shrug  of  the  shoulders ;  a  sympathetic  tickling  and  contraction  of 
the  muscles  of  the  neck,  anticipating  the  rope;  a  restless  uneasiness  to  ad 
journ,  dreading  to  face  the  storm  themselves  have  raised. 

"  Let  the  honest  and  indignant  part  of  your  Council  drive  the  wolves  out 
of  the  fold;  for,  by  low  intrigue  and  management  of  this  kind,  they  have 
been  imposed  upon,  and  duped  into  gross  error  and  palpable  absurdities. 
Some  of  them  have  been  thrown  out  of  folds  equally  sacred,  and  should 
be  denied  the  society  of  civilized  man. 

"  They  are  parricides,  piercing  their  devoted  country,  already  bleeding  at 
every  pore.  But,  thanks  be  to  my  God,  there  is  balm  in  Texas,  and  a  phy 
sician  near.  Our  agents  have  gone  abroad ;  our  army  has  been  organized ; 
our  general  is  in  the  field.  A  convention  has  been  called,  which  will  afford 


46  THE  FISCAL  HISTORY  OF  TEXAS. 

a  sovereign  remedy  to  the  vile  machinations  of  a  conspiring,  intriguing,  and 
corrupt  Council.  I  now  tell  you  that  the  course  here  pointed  out  shall  be 
rigidly  and  strictly  pursued,  and,  unless  your  body  will  make  the  neces 
sary  acknowledgments  to  the  world  of  your  error,  and  forthwith  proceed, 
and  with  the  same  facility  and  publicity  (by  issuing  a  circular),  and  fur 
nishing  expresses,  to  give  circulation  and  publicity,  in  a  manner  calculated 
to  counteract  its  baleful  effects,  that,  after  twelve  o'clock  to-morrow,  all  com 
munication  between  the  two  departments  shall  cease,  and  your  body  will 
stand  adjourned  until  the  first  of  March  next,  unless,  from  the  emergencies 
of  the  country,  you  should  be  convened  by  proclamation  at  an  earlier  period. 

"I  consider,  as  the  devisers  of  ways  and  means,  you  have  done  all  con 
templated  by  the  organic  law,  and  that  your  services  are  now  no  longer 
needed.  Until  the  Convention  meets,  I  will  continue  to  discharge  my 
duties  as  commander-in-chief  of  the  army  and  navy,  and  see  that  the  laws 
are  executed. 

"  The  foregoing  you  will  receive  as  notice  from  my  department,  which 
will  be  rigidly  carried  into  effect.  You  are  further  notified  that  audience 
will  not  be  given  to  any  member  or  special  committee  other  than  in  writing. 
I  will  immediately  proceed  to  publish  all  the  correspondence  between  the 
two  departments  by  proclamation  to  the  world,  and  assign  the  reasons  why 
I  have  pursued  this  course,  and  the  causes  which  have  impelled  me  to  do  it. 
"I  am,  gentlemen,  your  obedient  servant, 

"HENKY  SMITH,  Governor:' 

"January  9,  1836." 

Where  the  analogy  of  the  United  States  Government  failed 
him,  Governor  Smith  had  recourse  to  that  of  Great  Britain  in  de 
termining  the  extent  of  his  power.  The  King  or  Queen  of  Great 
Britain  has  power  to  prorogue  Parliament ;  but  the  President  of 
the  United  States  has  not  power  to  prorogue  Congress.  Our 
Texan  Oliver  Cromwell  had  become  tired  of  his  "Long  Parlia 
ment,"  and  was  for  dissolving  it  by  a  process  as  summary  as  that 
adopted  by  his  English  prototype,  and  with  apparently  much  the 
same  feelings. 

The  men  who  composed  the  General  Council  were  not  the  men 
to  yield  quietly  to  such  a  usurpation.  If  the  "Praise  God  Bare- 
bones  Parliament"  had  surrendered  to  one  tyrant,  that  was  no 
reason  why  free  and  independent  Americans  should  tamely  submit 
to  another.  They  received  the  Governor's  communication,  Janu 
ary  11,  and  referred  it  to  a  committee,  who  forthwith  made  re 
port — 

"  That  they  are  unable  to  express  any  other  views  to  this  House  than 
indignation  at  language  so  repulsive  to  every  moral  feeling  of  an  honorable 
man,  and  astonishment  that  this  community  should  have  been  so  miserably 
deceived  in  selecting,  for  the  high  office  of  Governor,  a  man  whose  language 
and  conduct  prove  his  early  habits  of  association  to  have  been  vulgar  and 


THE  FISCAL  HISTORY  OF  TEXAS.  47 

depraved,  and  his  present  disposition  that  of  a  tyrant.  That  they  repel  the 
infamous  charges  preferred  against  this  Council  and  its  members  as  false 
and  unfounded  in  every  part ;  and  contemn  the  style  and  language  as  low, 
blackguard,  and  vindictive,  and  every  way  unworthy  of  and  disgraceful 
to  the  office  whence  it  emanated,  and  as  an  outrageous  libel  on  the  body 
to  whom  it  is  addressed,  and  therefore  advise  the  return  of  the  paper,  ac 
companied  with  the  following  resolutions." 

This  report  was  unanimously  adopted,  together  with  resolutions, 
declaring  that  the  members  of  the  Council  were  the  immediate 
representatives  of  the  Sovereign  People — that  they  would  sustain 
the  dignity  of  the  government — that  Henry  Smith  be  ordered 
forthwith  to  cease  the  functions  of  his  office,  and  answer  certain 
charges  and  specifications  preferred  against  him,  &c.  &c. 

On  the  next  day,  they  issued  an  address  to  the  people,  in  which 
they  repelled  the  charges  brought  against  them  in  "  that  impu- 
dential  document,"  as  they  called  the  Governor's  message,  and 
brought  very  serious  charges  against  His  Excellency  himself,  A 
single  paragraph  will  serve  to  show  the  character  of  the  address : — 

"All  these  acts  of  stubbornness  and  pervcrseness  were  not  sufficient  to 
gratify  his  thirst  for  sole  dominion  and  arbitrary  sway  of  the  land.  His 
dignity  was  insulted  at  the  idea  of  the  existence  of  the  co-ordinate  branch 
of  the  Government,  to  curb  his  acts  and  check  his  usurpation.  He  became 
more  and  more  restless,  until,  enraged  at  the  presumption  of  the  Council, 
in  the  exercise  of  a  constitutional  right,  and  in  conformity  with  the  true 
interests  of  the  country,  to  pass  an  ordinance  and  decree,  by  a  constitutional 
majority,  after  it  had  been  vetoed  by  l  His  Excellency/  he  ignites :  his  fury, 
in  a  blaze,  consumes  his  prudence  (what  he  had)  ;  he  orders  the  Council  to 
disperse,  shuts  the  door  of  communication  between  the  two  departments, 
and  proclaims  himself  the  government." 

Governor  Smith  appears  to  have  been  astonished  by  this  act  of 
the  Council,  and  sought  to  reconcile  matters  by  sending  them,  on 
the  12th,  a  kind  of  half  apology.  After  confessing  that  he  had 
used  "much  asperity  of  language,"  but  which  he  considered  was 
called  for  by  what  he  deemed  "imprudent  acts"  of  the  Council, 
and  much  "intrigue  and  duplicity,"  he  concluded  as  follows: — 

"  If,  therefore,  your  body  should  think  proper  to  acknowledge  their  error 
by  an  immediate  correction  of  it,  which  I  consider  would  only  be  their 
reasonable  duty,  all  difference  between  the  two  departments  shall  cease, 
and,  so  far  as  I  am  concerned,  be  forever  buried  in  oblivion;  and  that 
friendly  and  harmonious  intercourse  resumed  which  should  ever  exist  be 
tween  the  different  branches  of  the  government.  I  suggest  and  solicit  this 
from  the  purest  motives,  believing  the  public  good  would  thereby  be  ad 
vanced.  Believing  the  rules  of  Christian  charity  require  us  to  bear  and 
forbear,  and  as  far  as  possible  to  overlook  the  errors  and  foibles  of  each 


48  THE  FISCAL  HISTORY  OF  TEXAS. 

other,  in  this  case  I  may  not  have  exercised  towards  your  body  that 
degree  of  forbearance  which  was  probably  your  due.  If  so,  I  have  been 
laboring  under  error,  and,  as  such,  hope  you  will  have  the  magnanimity  to 
extend  it  to  me,  and  the  two  branches  again  harmonize  to  the  promotion 
of.  the  true  interests  of  the  country." 

Gov.  Smith's  "  Christian  charity"  came  too  late.  The  Council 
refused  to  revoke  its  acts.  But  the  Governor  refused  to  be  tried 
by  them,  held  on  to  his  seals  of  office,  and  on  one  occasion  (Feb.  8), 
sending  to  demand  some  papers,  thus  instructed  his  messenger : — 

"  You  will  further  notify  them  that,  if  these  things  are  not  promptly 
complied  with,  and  they  immediately  desist  from  their  injurious  and  dis 
organizing  operations,  I  will  immediately  order  their  arrest  and  transmis 
sion  to  the  post  of  Bexar,  to  be  tried  by  court-martial/' 

"Every  inch  a  king"  was  Henry  Smith — or  would  have  been  if 
he  could  have  been.  But  the  members  of  Council  were  sovereigns 
also,  not  only  by  right  of  election,  but  by  right  of  descent  from 
the  heroes  of  1776.  From  the  10th  of  January,  Lieut. -Gov.,  Robin 
son  became,  under  their  sanction,  the  acting  governor.  It  was  by 
him  the  act  was  signed  authorizing  the  issue  of  treasury  notes. 
Governor  Smith  would,  if  he  could  have  found  no  other  reason, 
have  vetoed  it  from  the  mere  principle  of  contrariety. 


TEE  FISCAL  HISTORY  OF  TEXAS.  49 


CHAPTER   VI. 

PROCEEDINGS  UNDER  THE  GOVERNMENT  AD  INTERIM,  1836. 

Movements  of  Santa  Anna — His  capture  by  the  Texans — David  G.  Burnett,  Presi 
dent  ad  interim — Gloomy  condition  of  affairs  as  set  forth  in  his  message  to  the 
first  Congress — Small  cost  of  the  war  to  Sept.  1836 — Small  revenue  of  Provisional 
Government — Loans  of  Messrs.  Erwin,  Triplett,  and  their  associates. 

WHILE  Governor  Smith  and  the  Council  were  contending  for 
prerogatives,  the  Mexicans  were  preparing  to  reinvade  the  country. 
On  the  12th  of  February,  1836,  Santa  Anna  reached  the  Rio 
Grande  at  the  head  of  a  powerful  army,  and  swept  rapidly  along, 
marking  his  course  with  the  most  horrible  massacres,  recapturing 
from  the  Texans,  in  less  than  two  months'  time,  a  country  larger 
than  all  England,  and  spreading  devastation  in  every  direction. 

Fortunately  for  the  people  in  this  emergency,  political  power 
passed  from  the  hands  of  the  Provisional  Government,  and  its  con 
tending  factions,  into  the  hands  of  a  Convention,  which  assembled 
on  the  1st  of  March  at  the  town  of  Washington,  on  the  Brazos.  In 
this,  the  darkest  period  of  their  history,  the  Texans  made  (March 
2)  a  declaration  of  independence,  adopted  a  constitution  (March 
17)  as  an  independent  republic,  and  (March  16)  established  a  govern 
ment  ad  interim  to  act  till  the  constitution  could  be  brought  into  full 
operation. 

On  the  21st  of  April,  the  battle  of  San  Jacinto  was  fought.  On 
the  next  day,  the  Mexican  President,  Santa  Anna,  surrendered 
himself  a  prisoner  of  war;  and  thus,  in  seven  months  after  the  com 
mencement  of  hostilities,  was  achieved  the  independence  of  a  govern 
ment  which  claimed  territorial  limits  more  extensive  than  those  of 
our  thirteen  original  States  from  Maine  to  Georgia  included.* 

*  The  area  of  the  territory  claimed  by  the  Texan  Government  was  879,054 
square  miles.  The  Atlantic  States,  from  Maine  to  Georgia,  have,  including  Vermont, 
a  surface  of  378,402  square  miles;  without  Vermont,  268,290.  The  area  of  the 
British  Isles  is  122,185.  That  of  France,  202,125.  That  of  Austria,  260,000.  Texas 
has,  within  her  reduced  limits,  274,366  square  miles. 

4 


50  THE  FISCAL  HISTORY  OF  TEXAS. 

The  government  ad  interim,  appointed  by  the  Convention,  had 
simply  executive  powers.  David  G.  Burnett  was  made  President, 
and  Baily  Hardiman,  Secretary  of  the  Treasury. 

Its  fiscal  doings  are  summed  up  in  President  Burnett's  message 
to  the  First  Congress  of  the  Republic  (Oct.  4,  1836),  and  in  the 
accompanying  report  of  the  auditor  and  comptroller. 

After  mentioning  that  the  movements  of  the  enemy  had,  a  few 
days  after  its  organization,  compelled  the  government  ad  interim 
to  remove  from  Washington  to  Harrisburg,  he  says : — 

"  At  this  gloomy  period,  the  financial  affairs  of  the  country  were  in  a 
condition  more  deplorable  than  its  military  equipments.  The  Commis 
sioners,  Messrs.  Austin,  Archer,  and  Wharton,  appointed  by  the  late  Provi 
sional  Government,  had  negotiated  a  loan  for  two  hundred  thousand  dollars, 
and  another  for  fifty  thousand,  with  sundry  individuals  in  the  city  of  New 
Orleans.  It  was  doubtless  the  best  arrangement  that  could  be  made  at  that 
period.  Mr.  Robert  Triplett,  a  principal  subscriber  to  each  of  the  above 
loans,  presented  himself  to  the  government  at  Harrisburg.  Twenty 
thousand  dollars  had  been  paid  on  the  first  loan,  and  the  whole  of  the  second 
was  advanced.  The  ratification  of  these  loans  had  been  submitted  to  the 
Convention,  and  by  them  was  referred  to  the  Executive  Government.  On 
inspecting  the  terms  of  the  loans,  some  of  the  conditions  were  considered 
inadmissible.  The  exclusive  right  to  an  immediate  location  of  the  script 
was  a  privilege  which,  it  was  believed,  would  cause  infinite  dissatisfaction 
in  the  country,  and  be  especially  obnoxious  to  the  volunteers  of  the  army, 
the  nature  of  whose  services  would  seem  to  preclude  any  right  of  priority 
of  location  in  others.  For  no  species  of  public  service  is  considered  more 
onerous  or  more  entitled  to  recompense  than  that  which  is  rendered  on  the 
field  of  battle.  Under  these  impressions,  we  proposed  to  Mr.  Triplett 
a  modification  of  the  loans,  and  agreed  to  reduce  the  price  of  the  lands,  or 
rather  to  make  a  donation  of  thirty-two  leagues  of  land,  to  be  distributed  pro 
rata  among  the  stockholders,  in  consideration  of  the  relinquishment  of  the 
right  of  priority  of  location,  conceded  to  them  by  the  original  terms  of  the 
contract.  The  modification  was  accepted  by  Mr.  Triplett.  for  himself.  He 
was  not  vested  with  authority  to  bind  his  co-lenders,  but  he  expressed  an 
opinion  that  they  would  also  accede  to  it.  From  the  first  loan,  the  govern 
ment  confidently  anticipated  a  fiscal  aid  of  some  importance  in  the  then  press 
ing  emergency,  but  as  the  sequel  will  disclose  they  were  unhappily  disap 
pointed.  Mr.  Triplett,  on  his  return  to  the  United  States,  presented  his 
modified  contract  to  his  associate  stockholders,  and  to  our  surprise  they 
unanimously  voted  against  its  reception,  and  declined  advancing  the  resi 
duum  of  the  loan. 

"  Some  disappointment  resulted  from  this  decision  of  the  lenders,  and  the 
government  felt  the  inconvenience  of  an  illusory  anticipation.  A  new 
proposition  has  been  made  to  the  lenders  to  adjust  the  amounts  advanced  on 
the  principles  of  the  modified  contract,  but  no  definite  answer  has  been  had 
to  that  overture.  The  presumption  is  that  it  will  not  be  accepted,  and  that 


THE  FISCAL  HISTORY  OF  TEXAS.  51 

the  settlement  of  the  whole  transaction  will  devolve  on  Congress,  for  I  have 
long  since  determined  to  submit  the  whole  matter  to  your  consideration. 

"  The  result  of  this  negotiation  afforded  conclusive  evidence  of  the  im 
practicability  of  anticipating  the  wants  of  the  country  by  ordinary  loans. 
Some  other  course  was  necessary,  and  the  government  resolved  to  issue  script 
for  land,  considering  the  public  domain  as  the  most  available  and  the  least 
objectionable  source  of  public  revenue.  Accordingly,  the  agent  appointed, 
in  New  Orleans,  Thomas  Toby,  Esq.,  a  gentleman  who  had  already  made 
considerable  advances  on  the  account  of  the  government,  and  had  mani 
fested  a  warm  sympathy  in  our  behalf,  was  authorized. to  issue  script  to 
the  amount  of  five  hundred  thousand  acres  of  land,  to  be  located  on  the 
public  domain  of  Texas,  and  to  dispose  of  it  at  the  established  minimum 
price  of  fifty  cents  per  acre :  he  has  subsequently  been  empowered  to  extend 
his  issues  to  one  million  of  acres.  *  *  * 

"  A  number  of  patriotic  citizens  have  voluntarily  executed  their  bonds  for 
various  sums,  and  tendered  them  to  the  government,  with  a  view  to  relieve 
the  present  exigencies  of  the  country.  These  bonds,  amounting  in  the 
aggregate  to  one  hundred  and  twenty  thousand  dollars,  have  been  trans 
mitted  to  the  agents,  Messrs.  T.  Toby  &  Brother,  by  the  quartermaster- 
general,  and  the  hope  is  entertained  that  they  will  prove  a  present  conve 
nience.  *  *  * 

"  The  recent  and  much  lamented  decease  of  the  Honorable  Baily  Ilardi- 
man,  whose  devoted  patriotism  and  inflexible  integrity  are  well  known,  and 
who  has  been  with  me  through  all  the  vicissitudes  of  the  times,  deprives 
me  of  the  pleasure  of  presenting  you  with  a  regular  report  from  the  Trea 
sury  Department.  The  principal  intelligence  in  my  power  to  convey,  you 
will  find  in  the  auditor's  expost,  herewith  transmitted.  *  *  * 

"  It  will  be  recollected  that  the  powers  conferred  on  the  government  ad 
interim  were  extraordinary  j  that  they  comprised  the  plenal  attributes  of 
sovereignty,  the  legislative  and  judicial  functions  excepted.  The  circum 
stances  under  which  that  government  has  been  administered  have  been 
equally  extraordinary. 

"  Sometimes,  when  Texas  was  a  moving  mass  of  fugitives,  they  have  been 
without  ( a  local  habitation/  and  scattered  to  the  cardinal  points;  again, 
they  have  been  on  Galveston  Island  without  a  shelter  and  almost  without 
subsistence ;  and  never  have  they  been  in  circumstances  of  comfort  and 
convenience  suitable  to  the  orderly  conducting  of  the  grave  and  moment 
ous  business  committed  to  their  charge.  That  errors  should  have  been 
committed  under  such  circumstances  will  not  surprise  those  who  have  an 
honest  consciousness  of  their  own  fallibilities.  But  that  those  extraor 
dinary  powers  have  not  been  perverted  to  any  sinister  purpose,  to  the 
damage  of  the  country,  to  personal  aggrandizement,  or  to  the  creation  or 
advancement  of  a  party,  or  to  the  success  of  a  speculation,  I  assert  with  a 
modest,  but  firm  and  assured  confidence/' 

The  auditor  and  comptroller  say,  in  their  report — 

"  The  whole  amount  of  claims  audited  and  paid  by  treasury  orders  from 
the  1st  of  January  last,  at  which  time  our  offices  were  established,  up 
to  the  27th  of  September  inclusive,  is  as  follows  : — 


52  THE  FISCAL  HISTORY  OF  TEXAS. 

Military  claims,             $225,154  20 

Naval, 27,364  73 

Civil, 8,587  92 

Contingent,          .                                              .  6,427  84 

Total, $267,534  69 

"  In  cases  where  cash  has  been  advanced  and  for  supplies  furnished  by 
merchants  previous  to  the  1st  of  March  last,  the  orders  have  been  drawn 
bearing  an  interest  of  eight  per  cent,  per  annum.  The  amount  of  orders  of 
this  description  is  fifty-nine  thousand  four  hundred  and  sixty-eight  dollars 
and  forty-three  cents. 

"  The  account  of  Bryan  &  Hall,  late  agents  of  the  government  at 
New  Orleans,  have  been  submitted  to  this  office,  and  are  now  under  con 
sideration.  The  whole  amount  of  their  liabilities  [claims]  is  seventy-seven 
thousand  four  hundred  and  sixty-eight  dollars  and  seventy-six  cents,  of 
which  the  sum  of  fifty-three  thousand  four  hundred  and  sixty-eight  dol 
lars  and  seventy-six  cents  was  due  previous  to  the  1st  of  September 
instant/' 

As  this  report  brings  up  accounts  to  a  date  five  months  later 
than  the  battle  of  San  Jacinto,  it  shows  at  how  little  expense  to 
the  government  the  independence  of  the  country  was  achieved. 
If  it  had  been  possible  for  the  Texans  to  be  hard-money  men  and 
prompt-payment  men,  the  expense  would  have  been  much  less 
than  is  above  stated. 

These  claims  were  all  paid  by  drafts  on  an  empty  treasury. 
They  were  receivable  for  back  dues  on  the  public  lands,  but  there 
was  little  or  no  demand  for  them  for  this  purpose,  and  they  sank 
much  in  value. 

Something  might  have  been  derived  from  the  duty  on  imports, 
but  the  majority  of  the  merchants  so  arranged  their  business  as 
to  anticipate  the  operation  of  the  act.  McKinney  and  Williams 
afterwards  brought  one  or  two  vessels  into  port,  but  the  Provisional 
Government,  taking  into  consideration  the  great  aid  these  gentle 
men  had  rendered  to  the  cause,  passed  an  ordinance  (January  4, 
1836)  exempting  these  importations  from  duties,  in  order  to  place 
them  on  a  level  with  the  other  merchants. 

In  a  subsequent  report  from  the  Treasury  Department,  there 
is  an  allusion  to  a  sum  of  about  nine  hundred  and  fifteen  dollars 
received  for  customs  under  the  first  customs  act ;  but  whether  is 
thereby  meant  the  first  customs  act  under  the  Provisional  Govern 
ment  or  under  the  Republic,  we  cannot  tell. 

In  the  Report  of  the  Secretary  of  the  Treasury  of  April  18, 


THE  FISCAL  HISTORY  OF  TEXAS.  53 

1837,  it  is  stated  that  of  the  audited  claims  there   had   been 
redeemed 

"  By  J.  Fletcher,  Treasurer  of  the  Provisional  Government, 
as  per  his  account  filed  in  this  department,  ....  $664  08 

"  By  B.  Hardiman,  Secretary  of  Treasury  of  government 
ad  interim, $80  00." 

But  in  what  manner  these  enormous  amounts  were  redeemed, 
we  are  left  to  conjecture. 

The  sixty-five  thousand  dollars  borrowed  at  New  Orleans  was 
the  only  efficient  revenue  the  government  ad  interim  possessed. 
And  be  it  remembered  that  the  loan  from  Triplett  and  others, 
and  the  loan  from  Erwin  and  others,  were  both  honorably  paid. 

The  exact  amount  of  the  Triplett  loan  was  twenty  thousand 
and  seventy  dollars,  which  was  liquidated  by  granting  to  the 
parties  forty  thousand  acres  of  land  for  the  principal,  with  an 
addition  of  one  hundred  and  thirteen  thousand  three  hundred 
and  fifty-seven  acres  by  way  of  bonus. 

The  amount  received  from  the  Erwin  loan  was  forty-five  thou 
sand  eight  hundred  and  twenty  dollars,  which,  with  interest  added, 
six  thousand  one  hundred  and  seventy  dollars  and  forty-four  cents, 
was  liquidated  by  a  grant  of  land  of  one  hundred  and  three 
thousand  three  hundred  and  eighty- one  acres,  with  eighteen  thou 
sand  two  hundred  and  eight  acres  additional  by  way  of  bonus.  A 
balance  of  about  five  thousand  dollars  which  remained  due  was 
paid  in  money  to  the  representatives  of  this  firm  in  February, 
1852. 


54  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    VII. 

PROCEEDINGS  UNDER  THE  REPUBLIC.      FIRST  SESSION  OF  FIRST 
CONGRESS  :  OCTOBER  3  TO  DECEMBER,  1836. 

Gen.  Houston  installed  as  President — Deplorable  condition  of  the  navy — Contribu 
tions  of  Gen.  Thos.  J.  Green — Acts  relating  to  the  military  establishment — High 
salaries  of  officers  on  the  civil  list — New  tariff,  and  sale  of  Galveston  town-plot — 
"  A  public  debt  a  public  blessing" — Unsuccessful  effort  to  negotiate  a  loan  of 
twenty  thousand  dollars — Act  to  establish  a  general  land-office — Questions  whether 
foreign  volunteers  should  be  allowed  to  sell  their  land-certificates  to  aliens,  and 
whether  aliens  should  be  allowed  to  hold  lands  in  Texas — Recognition  of  decree 
for  establishing  the  Agricultural  and  Commercial  Bank — Act  to  incorporate  the 
Texas  Railroad,  Navigation,  and  Banking  Company — Proceedings  under  this  act. 

THE  first  Congress  commenced  its  first  session,  at  the  town  of 
Columbia,  on  the  3d  of  October,  1836  ;  and  on  the  22d,  Gen. 
Samuel  Houston,  who  had  been  duly  elected  by  the  people,  was 
formally  installed  as  President  of  the  Republic. 

On  the  26th,  Mr.  Fisher,  chairman  of  the  Committee  on  Naval 
Affairs,  made  a  report,  showing  the  deplorable  condition  of  the 
navy : — 

"  Your  Committee  on  Naval  Affairs,  to  whom  was  referred  the  report  of 
the  acting  Secretary  of  the  Navy,  and  a  resolution  calling  for  an  increase  of 
the  same,  have  instructed  me  to  submit  the  following  report,  and  the  bill 
accompanying  it,  from  the  report  of  the  acting  Secretary  of  the  Navy. 

"  That  arm  of  the  national  defence  appears  to  be  in  a  most  deplorable 
and  crippled  condition.  The  'Brutus'  and  '  Invincible'  are  both  in  New  York, 
in  a  situation  which  prevents  their  services  from  being  immediately  avail 
able  ;  and  the  *  Liberty'  is  detained  in  New  Orleans.  Thus,  while  momen 
tarily  in  expectation  of  a  blockade  from  the  enemy,  our  whole  line  of  sea- 
coast  is  defended  by  but  one  national  vessel,  the  '  Independence/  mounting 
seven  guns,  and  four  small  privateers,  each  pursuing  its  own  prey,  and  not 
immediately  subject  to  the  orders  of  government.  While  our  navy  remains 
in  this  condition,  it  is  in  the  power  of  the  enemy,  at  his  pleasure,  to  cut  off 
our  supplies,  and  seize  upon  our  seaports.  It  appears  to  your  committee 
that  the  error  which  has  produced  the  present  bad  condition  of  our  navy  has 
been  radical,  and  coexistent  with  its  first  formation.  In  order  to  raise  a  naval 
force  sufficient  to  co-operate  with  that  of  the  enemy,  the  government  was 
forced  to  purchase  such  vessels  as  could  most  easily  be  procured.  These  were 
vessels  either  originally  unfit  for  the  purpose  intended,  or  worn  out  in  the 


THE  FISCAL  HISTORY  OF  TEXAS.  55 

merchant  service.  The  consequence  has  heen  that  these  vessels  demanded 
daily  repairs,  and  were  seldom  in  a  situation  for  actual  service.  So  far,  in 
our  struggle  with  Mexico,  our  navy  has  proved  adequate  to  the  protection 
of  our  sea-coast,  and  to  the  annoyance  of  the  enemy.  But  the  navy  of  the 
enemy  has  lately  been  increased  by  the  addition  of  several  vessels  of  the 
most  splendid  description  ;  it  therefore  becomes  imperiously  necessary  that 
our  navy  should  be  increased  in  the  same  ratio. 

"  Your  committee,  therefore,  suggest  the  immediate  building  or  purchase 
of  the  following  description  of  vessels  : — 

"  One  sloop-of-war,  600  tons,  mounting  24  guns ; 

probable  cost,         ...  .       $60,000 

"  One  steam-vessel,  mounting  10  guns,   .         .         .         45,000 
"Two  schooners,  200  tons,  mounting  11  guns,          .         30,000 

$135,000" 

On  a  subsequent  page  of  the  Journal,  we  find  it  recorded  that 
Gen.  Thos.  J.  Green  "  had  voluntarily  sold  and  sacrificed  some, 
and  mortgaged  other  of  his  property  in  the  United  States  (to  the 
amount  in  all  of  $20,333  04),  for  the  purpose  of  procuring  men, 
munitions,  provisions,  &c.,  for  our  army,  and  also  to  release  two  of 
our  national  vessels,  then  in  New  Orleans,  under  arrest  for  debt, 
and  upon  a  charge  of  piracy.'' 

The  bill  reported  for  the  increase  of  the  navy  was  passed 
(November  18),  with  an  amendment  providing  that  there  should  be 
two  steam-vessels,  instead  of  one,  and  each  capable  of  transporting 
seven  hundred  and  fifty  men  and  provisions. 

Besides  this  act,  the  first  Congress,  at  its  first  session,  passed 
an  act,  December  20,  to  fix  the  military  establishment  of  Texas 
at  one  regiment  of  cavalry,  one  of  artillery,  and  four  regiments  of 
infantry,  amounting,  officers  included,  and  including  the  corps  of 
engineers  and  ordnance,  and  the  staff,  to  3,587  men ;  December 
5,  an  act  to  protect  the  frontier,  by  raising  a  battalion  of  280 
mounted  riflemen  ;  and,  December  22,  a  joint  resolution,  "  author 
izing  the  President  to  receive  forty  thousand  volunteers." 

December  9,  an  act  was  passed  to  compensate  the  officers  on  the 
civil  list.  The  President's  salary  was  fixed  at  ten  thousand  dol 
lars  a  year ;  that  of  each  of  the  members  of  his  cabinet  at  three 
thousand  five  hundred ;  and  a  long  list  of  civil  officers  in  propor 
tion.  A  State  government  would  have  been  content  to  allow  its 
chief  magistrate  a  salary  of  one  thousand,  or  fifteen  hundred  dol 
lars  ;  but  Texas  was  an  independent  republic,  and  had  to  support 
its  imperial  dignity  among  the  nations  of  the  earth.  Mr.  Branch 


56  THE  FISCAL  HISTORY  OF  TEXAS. 

Tanner  Archer  maintained  that  the  President  ought  to  have  as 
much  salary  as  the  President  of  the  United  States,  and  contended 
for  this  with  great  zeal,  for  two  or  three  days  in  succession. 

That  such  precisians  as  ex-Governor  Smith  might  have  no  cause 
of  complaint,  an  act  was  passed,  December  15,  appropriating 
$150,000  to  defray  the  expenses  of  the  navy  ;  $700,000  for  those 
of  the  army  ;  and  $150,000  for  those  of  executive  and  civil  de 
partments — in  all,  a  round  million. 

"  To  raise  a  revenue  by  imposts,"  an  act  was  passed,  December 
20,  imposing  ad  valorem  duties  of  various  rates,  from  one  to  fifty 
per  cent.,  and  a  tonnage-duty  of  $1  25  per  ton ;  but  it  defeated 
itself  by  one  of  its  provisions  making  audited  drafts  on  the  treasury 
receivable  for  such  duties. 

An  act,  relinquishing  to  Michael  B.  Menard  and  others  a  league 
(4444  acres)  and  "labor"  (i.  e.  a  lot  of  177  acres)  on  the  east 
end  of  Galveston  Island  (the  town-plot  of  Galveston),  was  passed 
December  9,  on  condition  of  their  paying  for  it  $50,000,  in  ap 
proved  acceptances  on  New  Orleans.  And  acts  and  resolutions 
were  also  passed  authorizing  land-script  to  the  amount  of  500,000 
acres  to  be  issued  to  Thomas  Toby,  of  New  Orleans,  to  be  sold 
by  him  at  fifty  cents  an  acre ;  making  David  White,  of  Mobile,  an 
agent  to  sell  script  at  the  same  rate,  to  the  amount  of  $100,000  ; 
and  providing  for  the  relief  of  Wm.  Bryan,  of  New  Orleans,  by 
granting  him  land-script,  by  the  sale  of  which  he  might  pay  himself 
what  was  due  to  him  by  the  Republic. 

But  the  chief  dependence  of  the  Congress  of  Texas  was  on  loans 
from  abroad.  True  disciples,  in  this  respect,  of  Alexander  Hamil 
ton,  they,  or  at  least  a  part  of  them,  regarded  a  public  debt  as  a 
public  blessing.  This  is  evident  from  a  report  made  by  a  select 
committee,  December  16,  Mr.  Chenoweth,  chairman : — 

"At  present,  our  indebtedness  is  small,  and  our  liabilities  almost  entirely 
to  private  individuals,  whose  claims,  your  committee  are  of  opinion,  may 
properly  be  merged  and  cancelled  by  the  creation  of  substantial  loans.  An 
outstanding  national  debt  may,  in  many  respects,  be  looked  upon  as  bene 
ficial,  by  a  community  isolated  and  dependent  as  Texas,  if  the  creditors,  as 
such,  can  afford  us  substantial  patronage.  And  until  we  can  stand  immu 
table  among  the  nations  of  the  earth,  your  committee  would  advise  that 
the  pecuniary  interests  of  our  creditors  will  excite  for  us  the  sympathies 
and  protection  of  mankind." 

A  public  debt  was  not  an  evil,  but  an  inconvenience  was  felt  in 


THE  FISCAL  HISTORY  OF  TEXAS.  57 

its  being  due  to  the  citizens  of  Texas,  instead  of  "to  foreigners," 
i.  e.  the  citizens  of  the  United  States.  Therefore,  leaving  unre- 
pealed  the  acts  of  the  Provisional  Government  authorizing  the 
million  loan,  and  the  hundred  thousand  dollar  loan,  an  act  was 
passed,  November  18,  "  to  authorize  the  President  to  negotiate 
a  loan  or  loans  on  the  bonds  of  the  government,  not  exceeding  five 
million  dollars,"  at  a  rate  of  interest  not  exceeding  ten  per  cent, 
per  annum  ;  and  due  provision  was  made  that  two  commissioners 
should  proceed  immediately  to  the  United  States,  for  the  purpose 
of  negotiating  said  bonds,  and  subsequently  to  Europe,  if  that 
should  be  necessary.  To  raise  immediate  means,  another  act 
was  passed,  December  10,  authorizing  the  President  to  borrow 
twenty  thousand  dollars,  and  empowering  him  to  stipulate  "  for 
such  an  amount  of  interest"  as  he  could  best  contract  for ;  that  is, 
empowering  him  to  borrow  at  the  rate  of  twenty  or  thirty  per 
cent.,  or  more,  if  he  could  not  borrow  the  money  for  less. 

The  act  of  most  importance  in  its  practical  bearings,  passed  at 
this  session,  was  that  to  open  the  land-offices,  or,  as  it  was  enti 
tled,  "  An  act  to  establish  a  General  Land-Office  for  the  Republic 
of  Texas."  This,  besides  one  general,  established  eleven  district 
offices,  and  provided — 

"That  surveys  should  be  made  at  the  expense  of  those  holding  warrants, 
but,  when  they  held  '  land-script/  at  the  expense  of  the  government.  That 
grantees  should  pay,  as  a  government  fee,  the  price  as  fixed  by  the  colo 
nization  laws  of  Coahuila  and  Texas  in  force  at  the  time  they  emigrated  to 
this  country.  That  no  person  should,  by  virtue  of  an  improvement,  have  a 
right  to  claim  more  than  one  league  and  <  labor'  of  land.  That  the  land- 
offices  should  open  on  the  1st  of  June,  1837,  for  all  those  citizens  who 
were  in  the  country  when  independence  was  declared  (March  2,  1836), 
and  for  those  who  served  a  term  as  volunteers  previous  to  that  time,  and 
remain  open  six  months  for  their  exclusive  benefit.  That  every  free  white 
person,  head  of  a  family,  who  should  arrive  in  the  Republic  from  and  after 
January  1,  1837,  should  be  entitled  to  1280  acres  of  land,  and  every  single 
white  free  man  640  acres,  to  be  increased  to  1280  acres  in  case  of  his 
marriage,  but  patents  not  to  be  granted  till  after  they  had  been  three  years 
resident." 

As  this  bill  gave  land  to  almost  everybody  that  was  in  the 
country,  and  almost  everybody  that  was  to  come  into  the  country, 
it  served  to  diminish  still  more  the  value  of  soldiers'  certificates. 

It  was,  however,  of  benefit  to  those  who  were  on  the  spot,  and 
who  had  the  means  wherewith  to  purchase  soldiers'  certificates 
and  settlers'  "head-rights.'' 


58  THE  FISCAL  HISTORY  OF  TEXAS. 

At  one  time  it  seems  to  have  been  mooted  whether  the  soldiers 
should  not  be  restricted  to  selling  their  certificates  to  actual  resi 
dents  of  Texas.  Nay,  the  question,  "Is  it  expedient  to  authorize 
by  law  foreign  volunteers  to  sell  their  bounty  land  to  aliens?"  was 
formally  referred  to  a  select  committee,  which,  through  Mr.  Baker, 
its  chairman,  made  a  report,  November  29,  1838,  in  which  they 
said — 

"  '  Is  it  expedient  to  authorize  by  law  foreign  volunteers  to  sell  their 
bounty  land  to  aliens?7  The  heart  of  every  true  friend  of  Texas  must 
answer,  '  Yes;  it  is  expedient;'  and  justice  and  gratitude  demand  that  they 
should  have  the  right  to  sell  it  to  whomsoever  and  wheresoever  they  can. 
That  they  should  not  be  compelled  to  sell  it  alone  to  Texan  speculators, 
but  that  the  defenders  of  Texan  liberty  should  have  all  the  rights  and  all 
the  benefits  this  government  can  confer/' 

In  a  report  extending  through  nine  or  ten  pages,  the  committee 
gave  equally  satisfactory  answers  to  the  questions — 

"  Is  it  expedient  to  authorize  by  law  those  aliens  who  have  aided  Texas 
in  her  struggle  for  independence,  to  hold  lands  in  Texas,  by  paying  a  bonus 
to  the  government  for  the  same  ?" 

"Is  it  expedient  to  authorize  by  law  the  citizens  of  Texas  to  sell  lands 
to  aliens,  upon  condition  that  the  purchaser  pay  a  bonus  to  the  government 
for  the  same?" 

The  answer  to  all  these  questions  was,  substantially,  "Yes;  it 
will  be  best  for  the  country,  and  best  for  the  land-speculators  we 
have  among  ourselves."  That  so  formal  a  report  should  have 
been  made  on  this  subject  is  proof  how  rife  the  spirit  of  land- 
speculation  was  in  Texas  at  a  time,  indeed,  when  her  independ 
ence  had  been  effected,  but  when  it  was  not  known  that  it  could  be 
sustained. 

The  act  to  open  the  land-offices  was  vetoed  by  President  Houston, 
because  it  was 

"  Evidently  impracticable,  without  opening  a  wide  door  for  confusion,  to 
commence  a  new  system  of  surveys  and  of  granting  lands,  until  some  definite 
rules  or  principles  are  established  to  ascertain  what  land  is  held  by  valid 
titles  and  what  is  vacant."  Because,  it  would  be  "doing  a  great  injustice 
to  the  army,  and  to  those  who  are  entitled  to  bounty  land,  to  open  the 
land-offices  until  such  rules  are  established,  as  to  the  selection  and  location 
of  bounty  lands,  as  will  place  them  on  a  just  equality  with  others."  And, 
lastly,  because  the  bill,  "  if  published  now,  will  only  serve  to  distract  the 
public  mind,  and  divert  the  public  attention  from  the  defence  of  the  country 
against  the  common  enemy,  and  direct  it  almost  exclusively  to  the  location 
of  land-script,  and  to  land-speculation." 


THE  FISCAL  HISTORY  OF  TEXAS.  59 

"L'etat !  cest  MOI,"  said  Louis  XIV.  "  Je  suis  T etai."  "  The 
State!  that  is  me.  I  am  the  State."  From  some  things  we  have 
heard,  we  have  been  led  to  believe  that,  as  Louis  XIV.  was  "  the 
State,"  in  the  kingdom  of  France,  so  Samuel  Houston  was  "the 
State,"  in  the  Republic  of  Texas.  But,  when  a  question  about  land- 
speculations  arose,  all  his  power  and  influence  was  a  mere  nullity. 
On  the  22d  of  December,  both  House  and  Senate  passed  the  bill, 
by  constitutional  majorities,  and  it  became  a  law  in  defiance  of  the 
President. 

At  the  period  of  which  we  are  now  speaking,  the  last  quarter 
of  1836,  paper-money  banking  had  reached  its  culminating  point 
in  our  Federal  Union.  Men  who  had  made  the  subject  their 
especial  study  saw  that  an  explosion  must  occur.  But  the  Congress 
of  the  United  States  was  blind  to  the  evils  about  to  ensue,  and  so 
was  the  Congress  of  Texas. 

On  the  30th  of  April,  1835,  nearly  six  months  before  the  com 
mencement  of  hostilities,  the  State  of  Coahuila  and  Texas  passed 
a  decree,  making  Samuel  M.  AYilliams,  of  the  firm  of  McKinney  and 
Williams,  the  empresario — that  is,  the  contractor,  or,  more  literally, 
the  undertaker — to  establish  a  bank  in  the  Department  of  Brazos, 
to  be  called  the  "  Commercial  and  Agricultural  Bank."  The  said 
bank  was  to  have  a  capital  not  exceeding  one  million  dollars, 
divided  into  shares  of  one  hundred  dollars  each.  As  soon  as  three 
hundred  thousand  dollars  were  subscribed,  a  meeting  was  to  be 
called,  and  directors  chosen.  The  bank  was  to  continue  for  twenty 
years,  and  to  have  the  privilege  of  establishing  branches  anywhere 
and  everywhere.  It  might  receive  eight  per  cent,  per  annum,  on 
loans  not  exceeding  six  months,  and  ten  per  cent,  on  loans  exceed 
ing  that  time ;  and  only  the  capital  of  the  bank  was  to  be  responsi 
ble  for  the  notes  it  issued.  It  was  a  most  liberal  charter  through 
out,  and  especially  as  it  provided  that  the  subscribers  should 
''adequately  secure  the  value  of  their  shares  with  real  estate  in 
the  Republic."  Or,  if  there  was  anything  illiberal  in  it,  it  was 
contained  in  a  single  clause,  which  provided  that,  "  as  soon  as  one 
hundred  thousand  dollars,  at  least,  have  entered  the  vaults  of  the 
bank,  it  may  commence  operations;  a  commissioner,  to  be  appointed 
by  the  executive,  previously  intervening,  who  shall,  furthermore, 
examine  every  year  the  state  of  the  concerns  of  the  association." 

Construed  according  to  the  common  principles  of  bank  interpre- 


60  THE  FISCAL  HISTORY  OF  TEXAS. 

tation,  we  do  not  know  that  even  this  clause  can  be  considered  as 
illiberal,  for  it  does  not  say  "one  hundred  thousand  dollars  in 
specie;"  and,  whatever  the  word  "dollars"  may  mean  in  Coahuila, 
it  means,  in  Texas  and  the  United  States,  whatever  people  choose 
to  make  it  mean. 

By  an  act  passed  December  10,  1836,  "for  the  relief  of 
McKinney  and  Williams,"  the  President  was  required  to  appoint 
a  commissioner  "  for  the  purpose  contemplated  in  the  tenth  article 
of  the  charter  of  the  Bank  of  Agriculture  and  Commerce,  granted 
to  Samuel  M.  Williams  by  the  Legislature  of  the  State  of  Coa 
huila  and  Texas,  in  April,  1835,  in  order  that  the  parties  may 
exercise  and  enjoy  their  privileges  under  said  act." 

That  the  Congress  of  Texas  looked  upon  this  as  only  the  com 
mencement  of  a  system,  is  evident  from  the  next  section,  which 
authorized  and  empowered  the  Secretary  of  the  Treasury  "to 
negotiate  a  loan,  from  any  bank  or  banks  that  may  be  established 
in  this  Republic,  of  sufficient  amount  for  the  payment  of  all  just 
claims  held  by  McKinney  and  Williams  against  this  government." 

If  there  is  any  doubt  on  this  subject  in  the  mind  of  the  reader, 
it  will  be  removed  when  we  inform  him  that  only  six  days  after 
wards,  or  on  the  16th  of  December,  an  act  was  passed  "  to  incor 
porate  the  Texas  Railroad,  Navigation,  and  Banking  Company," 
with  a  capital  stock  of  five  millions,  to  be  increased,  if  desirable,  to 
ten  millions,  and  with  the  right  of  connecting  the  waters  of  the 
Rio  Grande  and  the  Sabine  by  means  of  internal  navigation,  toge 
ther  with  the  privilege  of  making  branch  canals  and  branch  rail 
roads  in  every  direction. 

It  was  the  day  of  magnificent  schemes;  but  admiration  ought  not 
to  be  withheld  from  this,  especially  when  it  is  considered  that,  at 
this  very  moment,  when  a  line  of  artificial  navigation  of  five  hun 
dred  miles  was  projected,  the  Texans  had  not  the  means  of  defend 
ing  their  coast  from  the  insults  of  a  single  Mexican  sloop-of-war. 

In  every  respect  but  two,  the  charter  was  of  the  most  liberal 
description.  It  provided  that  the  bank  should  not  go  into  opera 
tion  until  it  had  "  a  specie  capital  of  one  million  dollars  paid  in," 
and  that  the  charter  should  be  forfeited  unless  a  bonus  of  twenty- 
five  thousand  dollars  should  be  paid  in  gold  and  silver,  within  eight 
een  months  of  the  date  of  the  act. 

The  necessary  amount  of  stock,  five  millions,  was  subscribed  by 


THE  FISCAL  HISTORY  OF  TEXAS.  61 

eight  individuals  and  firms;  and,  within  the  period  prescribed  by 
the  charter,  the  bonus  was  tendered  in  Texas  treasury  notes,  which 
by  law  were  then  receivable  for  all  public  dues.  The  Treasurer 
refused  to  receive  them,  but  gave  a  written  acknowledgment  that 
the  tender  had  been  made.  And,  if  it  were  not  for  the  provision 
requiring  a  "million  dollars  to  be  paid  in  specie  before  the  bank 
can  commence  operations,"  the  charter  might  be  worth  looking 
after  by  Northern  speculators. 

Even  as  it  was,  some  people  made  money  out  of  the  scheme. 
None  of  them,  as  we  have  learned  from  one  of  the  number,  paid 
anything  in ;  but  one  of  them  sold  out  his  interest  to  a  gentleman 
of  New  York  for  thirty  thousand  dollars,  and  received  his  pay  in 
store  goods.  The  successful  salesman  then  bought  out  the  interest 
of  another  of  the  subscribers  for  ten  thousand  dollars.  And  an 
other  one  of  the  gentlemen  concerned  disposed  of  his  interest  for 
three  leagues  of  land,  which  he  has  since  sold  at  two  dollars  and  a 
half  an  acre.  Thus  this  ten  million  scheme  enabled  three  of  the 
parties  to  realize  a  net  profit  of  about  sixty  thousand  dollars. 

The  rest  of  the  subscribers  retain  their  original  shares  to  this 
day. 

Of  the  operations  of  the  Commercial  and  Agricultural  Bank,  we 
shall  have  occasion  to  speak  hereafter. 


62  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    VIII. 

SECOND  SESSION  OF  THE  FIRST  CONGRESS :    MAY  1  TO  JUNE,  1837. 

Pecuniary  destitution  of  the  Government  of  the  Republic — Recognition  of  its  inde 
pendence  by  the  United  States — Statement  by  President  Houston  of  the  insuffi 
ciency  of  the  navy — Governor  Smith  made  Secretary  of  the  Treasury — Proceedings 
of  the  agencies  at  Mobile  and  New  Orleans — The  Secretary  of  the  Treasury  re 
ports  a  plan  for  raising  a  revenue,  and  funding  the  outstanding  debt — Acts  passed 
accordingly — Government  liabilities  worth  only  fifteen  cents  in  the  dollar — Projects 
for  additional  banks — Deplorable  condition  of  the  treasury — First  effective  act  for 
the  issue  of  treasury  notes. 

THE  first  Congress  met,  by  adjournment,  on  the  1st  of  May, 
1837,  at  the  town  of  Houston,  about  eighty  miles  inland,  by  the 
post-route,  from  Galveston.  Its  loan  acts  had  produced  nothing. 
Its  customs  act  had  produced  nothing.  And  its  acts  for  the  sale  of 
land-script  had  produced  little  or  nothing. 

The  "land-dues"  were  the  only  branch  of  the  revenue  that  was 
at  all  productive.  Mr.  Gail  Borden,  who  has  already  figured 
largely  in  our  history  on  account  of  the  fifty-eight  dollars  and  thirty 
cents  he  paid  into  the  treasury  of  the  Consultation,  made  himself 
still  more  illustrious  in  this  year  by  paying  into  the  treasury  of  the 
Republic  the  sum  of  $7,346  37.  It  is  true  that  this  amount  was 
in  "  land-script,"  and,  therefore,  not  available  as  efficient  revenue. 
But  Mr.  Gail  Borden  paid  over  what  he  had  received. 

Yet  there  was  cause  for  pride  and  exultation.  The  independ 
ence  of  Texas  had  been  acknowledged  by  the  Government  of  the 
United  States.  "  We  now,"  said  the  President, "  occupy  the  proud 
attitude  of  a  sovereign  and  independent  republic,  which  will  impose 
upon  us  the  obligation  of  evincing  to  the  world  that  we  are  worthy 
to  be  free.  This  only  will  be  accomplished  by  wise  legislation,  the 
maintenance  of  our  integrity,  and  the  faithful  and  just  redemption 
of  our  plighted  faith  wherever  it  has  been  pledged." 

When  the  President  went  to  announce  this  and  other  matters  to 
Congress,  he  was  received  with  a  pomp  and  ceremony  which  may 
cause  the  reader  to  fear  that  the  Texans  had,  by  living  under 


THE  FISCAL  HISTORY  OF  TEXAS.  63 

Mexican  rule,  lost  something  of  their  republican  simplicity.     Our 
extract  is  from  the  House  Journal,  of  May  5,  1837  : — 

"The  Senate  then  entered  the  hall,  preceded  by  their  sergeant-at-arms; 
the  President  pro  tern,  took  his  seat  on  the  right  hand  of  the  Speaker,  and 
presided  jointly  with  him. 

"  The  Senators  were  provided  with  seats  in  front  of  the  chair,  and  the 
officers  of  the  two  Houses  associated  in  their  several  duties  at  their  respective 
stations. 

"At  twelve  o'clock,  His  Excellency,  the  President,  entered  the  hall,  accom 
panied  by  the  heads  of  the  several  departments,  and  other  officers  of  the 
government,  and  also  by  Joseph  Tucker  Crawford,  Esq.,  His  Britannic 
Majesty's  Consul,  at  Tampico,  and  Commissioner  from  the  British  Govern 
ment  to  this  Republic,  and  preceded  by  the  joint  committee  of  the  two  Houses. 
The  President  was  received  by  the  members  of  the  two  Houses  standing  un 
covered,  and  was  conducted  to  a  seat  between  the  President  pro  tern,  of  the 
Senate,  and  the  Speaker  of  the  House. 

"  The  heads  of  the  departments,  the  British  commissioner,  and  the  other 
attendants  of  His  Excellency,  were  accommodated  with  seats  on  the  right 
hand  of  the  chair. 

"  The  members  having  resumed  their  seats,  after  a  short  pause,  His  Ex 
cellency  rose,  and  read  the  following  communication  : — 

[Here  follows  a  communication,  which  fills  eight  pages  of  the  printed 
Journal.] 

"His  Excellency,  having  concluded,  retired  from  the  hall,  conducted  and 
accompanied  as  on  his  entrance." 

In  this  communication,  the  President  gave,  substantially,  such  a 
view  of  the  finances  as  is  contained  in  the  initial  paragraph  of  this 
chapter,  renewed  his  objections  to  opening  the  land-offices,  and, 
speaking  of  the  subject  of  maritime  defence,  said: — 

"The  insufficiency  of  our  navy  must  be  a  subject  of  serious  considera 
tion.  When  the  constitutional  government  assumed  its  functions,  the  armed 
vessels, '  Brutus'  and  '  Invincible,'  were  in  the  port  of  New  York,  and  remained 
there  until  a  few  weeks  past,  when  they  returned,  but  without  either  crews 
or  provisions  for  a  cruise. 

"  The  f  Independence/  having  not  more  than  two  weeks'  provisions,  was 
taken  to  New  Orleans  some  months  since,  where  she  has  been  detained, 
and  has  not  yet  been  reported  to  this  government  for  service. 

"  At  an  early  day,  a  confidential  officer  was  dispatched  to  the  United 
States,  for  the  purpose  of  purchasing  such  vessels  as  would  enable  us  to  keep 
the  command  of  the  Gulf  from  our  enemy.  He  has  reported  to  the  proper 
department,  and  his  arrival  is  daily  expected  with  one  or  more  fine  vessels, 
in  preparation  to  defend  our  commerce,  and  make  reprisals  on  the  enemy. 

"  Our  commerce  has  suffered  to  some  extent,  and  a  small  portion  of  our 
supplies  for  the  army  has  been  captured,  and  taken  into  Mexican  ports." 

Before  the  close  of  the  session,  the  "Independence"  was  captured 
by  the  enemy,  and  the  navy  reduced  to  the  "Brutus"  and  the 
"  Invincible." 


64  THE  FISCAL  HISTORY  OF  TEXAS. 

The  reader's  old  friend  and  acquaintance,  ex-Governor  Henry 
Smith,  was  now  Secretary  of  the  Treasury,  and  he,  in  anticipation 
of  the  meeting  of  Congress,  had,  on  the  18th  of  April,  presented 
a  report  to  the  President.  It  was  made  up  chiefly  of  complaints 
of  the  Toby  agency  at  New  Orleans,  and  the  White  agency  at 
Mobile.  The  former  would  render  no  account  of  its  transactions 
to  the  department,  and  dishonored  all  the  drafts  drawn  upon  it. 
Mr.  Thomas  Toby  had,  moreover,  "  pursued  the  unwarrantable 
course  of  selling  the  script  at  one,  two,  and  three  years'  credit." 

Mr.  David  White  gave  no  better  satisfaction.  In  addition  to 
land-script,  commercial  acceptances  for  fifty  thousand  dollars,  being 
the  amount  that  had  been  paid  in  for  the  purchase  of  the  town- 
plot  of  Galveston,  had  been  put  into  his  hands.  "  Many  drafts 
have  been  drawn  on  this  agency,  and  but  few  paid.  If  any  por 
tion  of  the  fifty  thousand  dollar  acceptances  have  been  paid,  it  is 
unknown  to  this  department ;  and  of  the  few  which  have  been 
paid,  it  is  believed  they  were  generally  paid  in  land-script,  for 
which  the  agent  claims  his  commission  of  7J  per  cent." 

We  suspect  that,  if  the  agents  had  had  an  opportunity,  they  too 
would  have  had  complaints  to  make.  The  simple  truth  was,  that 
they  were  appointed  to  sell  what,  in  time  of  peace,  had  little  com 
mercial  value  even  in  Texas,  and  what  in  time  of  war  had  hardly 
any. 

So  "wrathful  was  the  President  that  he  ordered  that  no  further 
sales  should  be  made  by  these  agents,  and  that  they  should  pass 
over  to  a  special  agent,  appointed  for  the  purpose,  such  land-script 
as  remained  in  their  possession. 

The  whole  amount  of  audited  claims,  from  January  1,  1836,  to 
April  18, 1837,  was  stated  by  the  auditor  at  $604,985  43,  of  which 
only  $1,569  34  had  been  redeemed  by  receiving  the  evidence  of 
them  in  payment  of  public  dues. 

In  conformity  with  a  resolution  passed  at  the  first  session,  the 
Secretary  of  the  Treasury  made  another  report,  on  the  12th  of 
May,  containing  a  plan  of  revenue  and  finance.  In  this,  he  sug 
gested  a  new  tariff,  which,  he  supposed,  would  yield  two  hundred 
thousand  dollars  per  annum  :  Direct  taxes  on  lands,  and  all  other 
property,  which,  at  one-half  per  cent,  ad  valorem,  would  yield  one 
hundred  and  twenty-five  thousand  dollars.  And  besides  these, 


THE  FISCAL  HISTORY  OF  TEXAS.  65 

license  taxes  on  wholesale  and  retail  dealers,  taverns,  public  shows, 
and  billiard-tables,  the  produce  of  which  would  probably  amount 
to  ten  thousand  dollars.  Add  to  these,  forty  thousand  dollars  for 
"  present  supposed  dues  on  granted  lands,  and  the  Republic  would 
have  an  annual  revenue  of  three  hundred  and  seventy-five  thou 
sand  dollars." 

With  these  projects  of  taxation,  Governor  Smith  combined  a 
plan  for  funding,  which  consisted  in  issuing  certificates  of  stock, 
redeemable  in  not  less  than  five,  nor  more  than  ten  years,  and 
bearing  an  interest  of  ten  per  cent.,  the  said  certificates  to  be 
issued  in  exchange  for  audited  drafts  and  other  outstanding  evi 
dences  of  the  public  debt. 

Speaking  on  this  point,  the  Governor  says : — 

"  It  appears  clear  to  me,  under  the  present  depreciated  state  of  the  go 
vernment  liabilities,  that,  if  this  plan  be  adopted,  the  public  creditors  will 
soon  feel  relief,  and  the  claims  against  the  government,  in  the  form  of  audit 
or's  warrants,  now  possessing  but  a  nominal  value,  say  fifteen  cents  in  the 
dollar,  would  soon  approach  their  par  value.  If  the  banking  institutions 
of  the  country  should  go  into  operation,  as  contemplated,  this  stock,  then 
secured,  would  be  deemed  good  security  for  bank  accommodations,  and,  I 
have  no  doubt,  would  soon  gain  a  similar  credit  in  the  United  States,  and 
the  public  credit,  if  not  entirely  restored,  would  become  greatly  assisted  and 
benefited/' 

Here  we  find  Governor  Smith  suggesting  that  Texan  bonds  should 
be  made  a  foundation  for  Texan  banks.  But  whether  he  therein 
anticipated  or  borrowed  the  wisdom  of  the  founders  of  the  New 
York  free  banking  system,  must  be  left  to  the  decision  of  the 
reader. 

An  act  for  funding  the  public  debt  was  passed  June  7 ;  and  acts 
to  create  a  revenue  by  import  duties  and  direct  taxes  were  passed 
June  12. 

Thus  far  all  was  according  to  the  recommendations  of  the  Se 
cretary  of  the  Treasury.  But  on  the  9th,  only  two  days  after  the 
passage  of  the  funding  act,  and  three  days  before  the  passage  of 
the  acts  imposing  import  duties  and  direct  taxes,  another  act  was 
passed  authorizing  the  issue  of  promissory  notes  of  government,  to 
the  amount  of  five  hundred  thousand  dollars,  and  making  them 
receivable  for  all  public  dues.  This  was  not  according  to  Governor 
Smith's  recommendation,  and  gave  rise  to  serious  difficulties  be 
tween  him  and  the  Congress. 
5 


66  THE  FISCAL  HISTORY  OF  TEXAS. 

June  12,  an  act  was  passed  supplementary  to  the  act  to  establish 
a  general  land-office.  By  one  section  of  this,  it  was  provided  that 
the  opening  of  the  land-offices  should  be  further  postponed  till  the 
1st  of  October  ;  and  by  another  it  was  enacted — 

"  That,  after  the  first  day  of  October  next,  no  individual  arriving  in  the 
country  shall  be  entitled  to  land  as  an  emigrant ;  and  from  this  time  for 
ward  no  more  bounty  land  shall  be  given  as  an  inducement  to  any  one  to 
enter  into  service  in  the  army  of  Texas." 

It  was  quite  time  that  some  provision  like  this  should  be  adopted  ; 
for,  if  lands  should  be  given  to  every  emigrant,  it  would  be  diffi 
cult  for  those  who  had  bought  up  soldiers'  certificates  and  old 
settlers'  "  head-rights"  to  find  purchasers. 

President  Houston  vetoed  this  bill ;  but,  like  that  to  which  it 
was  a  supplement,  it  was  passed  in  defiance  of  him. 

It  was  thought  that  the  Commercial  and  Agricultural  Bank,  and 
the  Texas  Railroad,  Navigation,  and  Banking  Company,  with  their 
capitals  (that  were  to  be)  of  six  to  eleven  millions,  would  not  afford 
sufficient  banking  facilities  to  a  population  of  somewhere  between 
twenty  and  fifty  thousand.  Therefore,  projects  were  brought  for 
ward  for  the  incorporation  of  a  "  Joint-Stock  Company  for  the 
Erection  of  a  Hotel  and  Bath-house  at  Yelasco,  with  Banking  Pri 
vileges  ;"  for  another  of  like  kind  at  Houston  ;  for  the  incorpora 
tion  of  the  "  Internal  Improvement  and  Banking  Company  of 
Texas;"  for  the  incorporation  of  the  "Red  River  and  Aransaso 
Bay,  Railroad,  Navigation,  and  Banking  Company,"  embracing  a 
scheme  hardly  less  magnificent  than  that  of  the  "  Texas  Railroad, 
Navigation,  and  Banking  Company;"  and,  finally,  for  establishing 
a  bank  on  the  faith  of  the  government. 

All  these  projects  were  favorably  received.  But,  before  the 
necessary  laws  could  be  passed,  news  was  received  of  the  grand 
explosion  of  the  banks  in  the  United  States,  and  they  were  suf 
fered  to  die  a  natural  death. 

The  fact  that,  at  the  commencement  of  this  session,  audited 
drafts,  the  only  Texan  "promises  to  pay"  which  were  then  afloat, 
were  worth  but  fifteen  cents  in  the  dollar,  must  have  convinced 
the  reader  that  the  finances  of  Texas  were  in  a  deplorable  con 
dition.  If  he  supposes  there  was  any  improvement  before  the 
Congress  adjourned,  the  following  message  from  the  President  will 
dispel  his  illusion : — 


THE  FISCAL  HISTORY  OF  TEXAS.  67 

"  EXECUTIVE  DEPARTMENT,  CITY  OF  HOUSTON,  June  6,  1837. 
"  Gentlemen  of  the  Senate  and  House  of  Representatives  : — 

"  I  cannot  forbear  calling  your  attention  to  the  condition  of  the  subsist 
ence  and  quartermaster's  department  of  this  government.  The  inclosed 
document  will  exhibit  the  amount  of  liabilities  that  must  be  immediately 
met,  or  the  credit  of  the  government  will  be  entirely  destroyed. 

"  I  would  have  laid  the  subject  before  your  honorable  body  at  an  earlier 
day,  had  it  been  in  my  power  to  have  acquired  the  information  desirable. 
Without  the  interposition  of  Congress,  the  situation  of  the  country  must  be 
truly  deplorable. 

u  The  government  was  unable,  upon  its  own  credit,  to  obtain  the  supplies 
absolutely  necessary  to  the  emergencies  of  the  army.  The  Executive  has 
been  compelled  to  give  his  individual  obligation  for  supplies  for  the  army, 
indorsed  by  some  of  the  honorable  members  of  your  body.  This  was  done 
at  a  time  when  a  part  of  the  army  was  in  an  actual  state  of  mutiny,  from 
want  of  every  kind  of  provisions.  Galveston  Island  would  have  been  de 
serted,  had  not  this  course  been  pursued. 

"Since  the  commencement  of  the  constitutional  government, no  public 
officer  has  received  any  salary.  Their  personal  expenses  are  great,  from  the 
fact  of  their  having  to  pay  an  exorbitant  price  for  board.  Their  individual 
means  are  quite  exhausted.  They  have  tendered  me  resignations  from  time 
to  time,  induced  by  their  actual  necessities,  intending  to  pursue  some  other 
course  that  they  might  obtain  the  means  of  subsistence.  The  Executive, 
since  he  has  come  into  office,  has  received  into  the  treasury  and  disbursed 
only  five  hundred  dollars  for  provisions  for  the  troops.  Under  these  circum 
stances,  your  honorable  body  must  be  aware  of  the  absolute  necessity  of 
some  provision  being  made  to  sustain  the  country  •  and  the  aid  which  it  is 
in  your  power  to  give  is  most  sincerely  and  earnestly  invoked. 

"SAMUEL  HOUSTON." 

The  message  was  referred  to  the  Committee  of  Ways  and  Means, 
and  on  the  next  day  that  committee  reported  a  bill  for  the  issue 
of  five  hundred  thousand  dollars  in  promissory  notes;  but  the 
whole  of  these,  it  was  provided,  should  be  issued  and  paid  out 
alone  for,  and  on  account  of,  the  expenses  of  the  civil  department 
of  the  government,  except  one  hundred  thousand  dollars  for  the 
purchase  of  horses  and  munitions  to  be  used  by  the  rangers  and 
mounted  gun-men  in  a  war  against  the  Indians. 


68  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTEE   IX. 

"  CALLED    SESSION"  OF    THE    SECOND    CONGRESS:    SEPTEMBER   25    TO 
NOVEMBER  4,  1837. 

The  opening  of  the  land-offices  postponed — Differences  of  opinion  of  the  Secretary 
of  the  Treasury  and  Congress  on  the  subject  of  treasury  notes — Reasons  for  not 
issuing  land-script  to  the  soldiers — Low  price  of  land-script  at  New  Orleans — Act 
for  augmenting  the  navy. 

NOVEMBER  6th  was  the  time  appointed  by  law  for  the  Second 
Congress  to  assemble ;  but  the  President,  by  proclamation,  called 
them  together  on  the  25th  of  September.  In  his  opening  message, 
he  gave,  as  his  reasons,  that  preparations  were  making  to  run  the 
boundary-line  between  the  United  States  and  Texas,  and  that  this 
might  conflict  with  the  law  of  the  last  session  for  opening  the  land- 
offices — 

(l  Inasmuch  as  some  of  the  districts  would  necessarily  fall  within  that 
section  of  country  over  which  the  United  States  have,  for  some  years,  ex 
ercised  civil  jurisdiction;  but  over  which,  there  is  no  doubt,  the  Govern 
ment  of  Texas,  so  soon  as  the  limits  of  each  country  are  defined,  will  be 
manifestly  entitled  to  the  civil,  as  well  as  the  political,  jurisdiction/' 

Without  any  unnecessary  delay,  a  joint  resolution  was  adopted 
"to  suspend  the  operations  of  the  land-offices  until  the  further 
action  of  Congress."  Thus,  a  measure  which  was  to  have  been 
consummated  on  the  1st  of  June,  1837,  and  which  was  afterwards 
deferred  to  the  1st  of  October,  was  now  indefinitely  postponed, 
greatly  to  the  satisfaction  of  President  Houston,  and  greatly  to 
the  chagrin  of  some  of  his  opponents. 

The  act,  passed  at  the  last  session  for  funding  the  public  debt, 
had  not  been  carried  into  effect ;  and  neither  had  that  for  the 
issue  of  promissory  notes.  For  this,  the  Secretary  of  the  Trea 
sury  was  called  to  account.  He  replied,  October  13th,  that  the 
two  laws  were  incompatible;  and  that  the  act  of  June  9th,  requir 
ing  promissory  notes  to  be  issued,  appeared  to  be  superseded  in 
its  chief  provision  by  an  act  of  subsequent  date,  or  of  June  12th, 


THE  FISCAL  HISTORY  OF  TEXAS.  69 

for  imposing  duties  on  imports,  which  last  act  required  that  all 
such  duties  should  be  paid  "in  gold  and  silver,  or  such  current 
'bank-notes  as  the  government  might  direct."  If  the  duties  were 
received  in  treasury  notes,  as  directed  by  the  act  of  June  9th,  it 
would  be  folly  to  fund  the  outstanding  audited  drafts,  inasmuch  as 
the  government  could  then  comply  with  its  promise  to  pay  interest 
only  by  giving  to  the  fundholder  other  paper  promises.  There 
fore,  he  had  waited  for  the  further  action  of  the  Congress. 

Governor  Smith's  plan  was  a  very  plausible  one.  It  rested,  in 
fact,  on  sound  principles,  but  on  principles  which  could  not  be 
carried  out  in  the  existing  condition  of  things  in  Texas. 

In  a  long  report,  the  Secretary  of  the  Treasury  explained  his 
views ;  but  his  reasons  were  not  satisfactory  to  the  lawgivers  of 
the  Republic.  They  were  resolved  that  a  government  paper- 
money  should  be  issued  in  the  form  of  promissory  notes,  or  trea 
sury  bills.  But  here  a  new  difficulty  arose.  The  President  was, 
by  law,  required  to  subscribe  the  bills,  and  it  would  be  a  work  of 
great  labor  to  sign  so  many.  How  could  he  do  it?  He  was  still 
suffering  under  a  wound,  received  at  the  battle  of  San  Jacinto,  and 
was  otherwise  indisposed.  Either  compassionating  the  condition 
of  the  President,  or  else  resolved  that  their  favorite  measure 
should  not  be  defeated  by  any  pretext,  however  plausible,  Congress 
passed  a  joint  resolution,  October  23d,  "  authorizing  William  G. 
Cooke  to  sign  the  name  of  the  President  to  the  promissory  notes 
of  the  government,"  in  the  preamble  to  which  due  prominence  was 
given  "  to  the  disabled  situation  of  His  Excellency's  right  arm  from 
a  former  wound,  aggravated  by  his  present  sickness."  It  was 
added  that  "  the  necessary  and  pressing  wants  of  the  country  re 
quire  that  the  issue  of  such  notes  should  immediately  commence." 

The  Secretary  of  War  was  also  called  to  account  for  not  having 
issued  land- warrants  to  the  soldiers,  as  had  been  ordered ;  and  the 
President  answered  for  him  : — 

"It  (the  law  containing  the  order)  was  not  thought  to  be  imperative  as 
to  its  immediate  execution.  Had  the  Executive  approved  its  immediate 
execution,  or  the  Secretary  of  War  performed  it,  nothing  appeared  more 
ruinous  to  the  country.  Our  army  was  numerous;  it  was  destitute  of 
clothing;  it  was  without  ten  days'  provisions;  it  had  not  five  hundred  effi 
cient  arms;  it  was  wofully  defective  in  ammunition  (and,  I  regret  to  say, 
that  the  country  is  without  any  at  this  time) :  we  had  to  look  abroad  for 
our  supplies :  general  discontent  prevailed  in  the  army. 

"Our  only  reliance,  for  the  remedy  of  these  evils,  was  upon  the  script 


70  THE  FISCAL  HISTORY  OF  TEXAS. 

which  had  been  sent  to  agents  of  the  government  in  the  United  States,  to 
be  disposed  of.  Unless  that  scheme  should  prove  successful,  the  army  must 
remain  destitute,  which  would  soon  have  led  to  anarchy  and  its  dissolution. 

"Under  the  directions  of  the  government  ad  interim,  the  acting  pay 
master-general  had  issued  upwards  of  thirty  thousand  acres  of  land-certifi 
cates  for  discharged  soldiers.  They  immediately  sailed  for  New  Orleans ; 
and,  on  their  arrival  there,  finding  themselves  destitute  of  means,  they 
found  persons  there  always  ready  to  purchase  at  a  great  sacrifice.  It  was 
sold  at  twenty  cents  per  acre,  and  under  that  price.  Speculators  soon 
availed  themselves  of  these  facts. 

"  When  the  script  of  the  government  was  brought  into  market  at  fifty 
cents  per  acre,  there  were  always  persons  who  had  purchased  the  soldiers' 
certificates  for  a  mere  nominal  amount,  who  were  prepared  to  speculate  upon 
it  at  a  price  from  twenty-five  to  thirty  cents  per  acre,  alleging  that  it  ema 
nated  from  the  government,  and  that  it  was  equally  as  good  as  the  script 
sent  there  by  the  government.  This,  at  once,  depreciated  the  script  of  the 
government,  and  rendered  it  impossible  to  vend  it  for  cash,  or  to  purchase 
supplies  for  the  army,  without  paying  from  one  to  two  hundred  per  cent, 
advance  for  them." 

This  reasoning  did  not  convince  the  Texan  Congress.  They, 
in  defiance  of  the  President's  veto,  passed  a  joint  resolution  to  re 
quire  the  Secretary  of  War  to  issue  land-warrants  to  the  soldiers. 
If  they  did  this  with  a  view  of  buying  them  up  themselves,  at  a 
low  price,  the  journals  do  not  disclose  the  fact. 

At  this  session,  an  act  was  passed  for  augmenting  the  navy.  It 
authorized 

"The  buying  or  building,  arming  and  equipping  'of  one  ship  or  brig, 
of  about  five  hundred  tons  burden,  to  mount  eighteen  guns;  two  barks  or 
brigs,  about  three  hundred  tons  burden,  mounting  twelve  guns  each;  and 
three  schooners,  about  one  hundred  and  thirty  tons  burden,  mounting  five 
or  seven  guns  each/  It  was  further  enacted  'that  the  sum  of  two  hun 
dred  and  eighty  thousand  dollars  is  hereby  appropriated  for  the  purpose ' 
aforesaid,  'and  that  the  public  faith  is  solemnly  pledged  for  its  payment/  ;J 

Under  this  act  sundry  vessels  were  purchased,  of  which  we  shall 
have  occasion  to  speak  hereafter. 


THE  FISCAL  HISTORY  OF  TEXAS.  71 


CHAPTER    X. 

FIRST  REGULAR  SESSION  OF  SECOND  CONGRESS:   NOVEMBER  6  TO 
DECEMBER,  1837. 

Issues  of  treasury  notes  commenced  November  1,  1837 — New  difficulties  between 
the  Secretary  of  the  Treasury  and  Congress — Want  of  money  and  want  of  credit 
— "Boundless  revenue"  expected  from  the  opening  of  the  land-offices — The  navy 
almost  extinct — Moderate  amount  of  public  expenses  up  to  November,  1837 — A 
new  tariff — Authority  for  the  issue  of  more  treasury  notes — Distinction  between 
original  holders  and  assignees  of  Texan  securities — The  agent  sent  to  the  United 
States  to  sell  land-script  recalled — Unreasonable  expectations  of  the  Texan 
Government  in  relation  to  its  public  lands — New  act  for  opening  the  land-offices. 

ONLY  one  day  elapsed  between  the  close  of  the  "  called"  and 
the  commencement  of  the  regular  session,  and  that  was  a  Sunday. 

The  Secretary  of  the  Treasury  was  again  called  to  account. 
The  issue  of  treasury  notes  commenced  on  or  about  the  1st  of 
November,  but  on  the  5th  he  addressed  a  letter  to  the  collectors 
of  customs,  forbidding  them  to  take  such  notes  in  payment  of 
duties ;  and,  on  the  13th,  he,  by  order  of  the  President,  addressed 
another  letter  directing  them  to  receive  the  said  notes  as  cash. 

In  his  report  to  Congress  on  this  subject,  the  Secretary  says  : — 

"  In  issuing  the  inhibitory  order,  I  conscientiously  believe  I  was  right, 
and  acting  in  the  lawful  discharge  of  my  duty.  And,  in  issuing  the  coun 
termand  which  immediately  followed,  I  also  considered  I  was  right,  as  it 
was  ordered  by  my  superior,  who  assumed  the  responsibility." 

In  a  good  many  respects,  the  Government  of  Texas  appears  to 
have  been  imperial  rather  than  republican.  And  if  Henry  Smith, 
when  in  one  position,  knew  how  to  command,  he  here  gave  evi 
dence  that,  when  placed  in  another,  he  knew  how  to  obey. 

Again  was  the  Secretary  of  the  Treasury  called  to  account.  He 
had  done  nothing  towards  funding  the  floating  debt.  Why  had 
he  neglected  this  important  duty  ? 

He  replied: — 

"  In  two  previous  communications  to  your  House,  I  have  adverted  to 
the  substantial  reasons  which  have  induced  me  to  delay  its  execution,  in 


72  THE  FISCAL  HISTORY  OF  TEXAS. 

terms,  as  I  conceived,  too  plain  to  be  misunderstood.  Ever  willing,  how 
ever,  to  account  for  any  seeming  neglect  of  official  duty  on  my  part,  I  give 
the  following  as  the  last,  though  not  the  least  reason,  why  that  law  has 
been  delayed  in  its  execution  :  Two  different  bills  have  been  sent  up  to 
New  Orleans  for  suitable  and  necessary  stationery  to  be  used  for  that  and 
other  public  purposes,  neither  of  which,  however,  have  been  filled,  for  rea 
sons  which  it  is  easy  to  imagine." 

A  plain-spoken  man  was  Henry  Smith ;  but  here  he  resorts  to 
a  euphuism.  It  was  too  much  even  for  him  to  say  that  the 
government  had  neither  cash  nor  credit  wherewith  to  purchase 
pen,  ink,  and  paper. 

On  the  21st,  the  President,  having  been  before  prevented  by 
sickness,  delivered  his  message. 

In  it  he  said  : — 

"  The  finances  of  our  country,  since  the  commencement  of  the  revolution 
up  to  this  time,  have  been  in  a  more  embarrassed  situation,  doubtless,  than 
any  other  nation  ever  experienced.  Since  the  commencement  of  the  pre 
sent  administration,  during  the  first  year,  there  was  at  the  disposition  of 
the  Executive,  or  in  the  treasury,  but  five  hundred  dollars  in  cash.  The 
several  amounts  that  had  been  appropriated  for  specific  or  general  purposes 
depended  on  the  sale  of  script,  and  iliat,  by  acts  of  Congress,  was  placed  in 
the  hands  of  foreign  agents,  who  were  irresponsible  to  the  Executive.  *  * 
This  imaginary  and  unfortunate  expedient  is  now  at  end,  and  has  left  the 
government  in  a  situation  to  afford  the  most  ample  redemption  of  all  her 
pledges  and  responsibilities. 

"  A  boundless  revenue  to  the  country  will  accrue  from  the  opening  of 
the  land-offices,  and  so  soon  as  that  can  take  place  consistently  with  the 
positive  provisions  of  the  constitution,  and  regulated  by  such  enactments  as 
will  guard  the  public  interest  against  fraud  and  imposition,  it  will  meet  the 
desire  of  the  Executive,  and  promote  the  public  tranquillity." 

As  will  be  seen  hereafter,  this  "  boundless  revenue"  was  all  an 
illusion,  and  even  less  was  derived  from  the  opening  of  the  land- 
offices  than  from  the  sale  of  land-script. 

"  Owing,"  he  continued,  "  to  the  financial  derangements  of  the  United 
States,  from  which  our  currency  was  almost  entirely  derived,  and  where,  it 
was  hoped,  that  this  country  could  obtain  a  negotiation  for  five  millions  of 
dollars,  our  expectations  have  not  been  realized.  By  the  last  advices  from 
our  agents  of  the  loan,  they  had  not  succeeded,  but  regarded  the  prospect 
of  success  greater  than  had  been  at  any  previous  time." 

Here  was  another  illusion  of  the  Texans,  even  greater  and  more 
permanent  than  that  founded  on  the  sale  of  land-script,  or  that 
resting  on  the  opening  of  the  land-offices. 

Of  the  treasury  note  system,  the  President  gave  a  qualified  ap- 


THE  FISCAL  HISTORY  OF  TEXAS.  73 

proval  :  provided  the  issues  were  not  of  a  greater  amount  than 
"  would  meet  the  actual  necessities  of  a  circulating  medium.'' 
The  report  of  the  Secretary  of  the  Navy  was  very  gloomy  : — 

"  While  the  country  has  been  gradually  rising  from  the  effects  of  the 
revolution,  our  navy  has  become  almost  extinct.  The  embarrassed  situa 
tion  of  our  financial  affairs  has  heretofore  rendered  it  impossible  to  make 
the  necessary  appropriations  for  keeping  it  up  ]  and  we  now  have  but  one 
small  vessel  afloat  to  guard  a  coast  of  more  than  six  hundred  miles  in 
length.  While  our  navy  is  in  this  shattered  condition,  and  entirely  unable 
to  afford  the  necessary  protection  to  our  commerce,  the  Mexicans  have  found 
means  to  make  such  additions  to  their  own  naval  strength  as  will  enable 
them  to  hold  an  entire  control  of  the  Gulf." 

On  the  30th  of  November,  the  Secretary  of  the  Treasury  made 
a  report ;  from  one  of  the  documents  appended  to  which,  we  learn 
that  the  amount  of  claims  audited  up  to  17th  of  November  was — 

Military    .....  $903,720  85 

Civil         .             .             .             .             .  142,902  59 

Naval        .....  56,850  65 

Contingent             ....  23,334  35 

Total  ....          $1,126,808  44 

"  From  which  should  be  deducted  drafts  taken  in  for  public  dues,  &c., 
$34,824  79,  leaving  outstanding  $1,090,984  45." 

Here  we  find  that  even  two  years  after  the  commencement  of 
the  war,  the  public  debt,  so  far  as  ascertained,  was  but  little  more 
than  a  million  ;  not  because  the  government  had  any  objection  to 
running  in  debt  to  a  greater  amount,  but  because  few  would  trust 
it,  except  such  as  could  not  well  avoid  so  doing. 

Six  months  having  elapsed  since  the  passage  (June  12)  of  the 
last  act  for  raising  a  revenue  by  a  duty  on  imports,  it  was  now 
(December  18)  deemed  high  time  to  pass  another,  and  accord 
ingly  another  was  passed,  giving  a  new  list  of  free  articles,  and 
modifying  the  ad  valorem  rates  on  some  of  the  articles  that  re 
mained  dutiable.  Another  act  was  passed  to  give  efficiency  to 
the  law  licensing  billiard-tables,  retailers  of  liquor,  &c. 

So  good  a  purpose  did  the  treasury  notes  appear  to  answer, 
that  an  act  was  passed  (December  14)  authorizing  an  increase  of 
the  issues  in  the  amount  of  $150,000,  and  the  invidious  distinc 
tion  in  the  act  of  June  9,  in  which  it  was  provided  that  treasury 
notes  should  be  issued  only  to  defray  the  expenses  of  the  civil 
department,  and  those  of  the  gun-men  and  mounted  rangers  was 


74  THE  FISCAL  HISTORY  OF  TEXAS. 

done  away  with.  A  liberal  appropriation  of  them  was  now  made 
for  the  pay  of  the  officers  of  the  army  and  navy.  But  it  was 
provided  that  any  soldier  or  sailor,  who  should  present  his  drafts 
to  the  Treasurer,  to  be  exchanged  for  treasury  notes,  should  take 
an  oath  "  that  said  draft  or  drafts  had  originally  been  issued  to 
him,  that  he  had  not  sold  them,  alienated,  or  pledged  them  to  any 
person,  and  that  he  was  then  the  bonafide  and  sole  owner  of  it  or 
them." 

This  making  of  a  distinction  between  the  original  holders  of 
public  obligations,  and  those  into  whose  hands  they  might  pass,  was 
a  cardinal  principle  of  Texan  policy.  But  it  only  injured  those 
it  was  professedly  intended  to  serve.  The  more  the  restrictions 
that  are  imposed  on  the  passage  of  public  obligations  from  hand 
to  hand,  the  more  is  their  value  diminished.  By  this  law,  the 
soldier  or  sailor,  who  was  at  the  seat  of  government,  could  ex 
change  his  drafts  for  treasury  notes,  which  were  receivable  for  all 
public  dues;  while  he  that  was  at  a  distance  was  obliged  to  sell 
his  drafts  for  what  they  would  bring,  and  as  they  were  receivable 
only  for  land-dues  and  direct  taxes,  they  were  of  less  value  than 
treasury  notes. 

Texan  regulations  in  regard  to  the  different  evidences  of  public 
debt  were  so  various,  and  changed  so  often,  that  it  seems  as  if  it 
must  have  been  necessary  for  a  man  to  fee  a  lawyer  to  ascertain 
the  exact  value  of  the  different  securities  he  held  in  his  hands. 

By  way  of  giving  a  little  variety  to  the  currency,  a  resolution 
was  passed  (Dec.  14th)  authorizing  the  Treasurer  to  issue  "  change 
notes"  of  the  denominations  of  one,  two,  and  three  dollars,  in  ex 
change  for  notes  of  larger  denominations.  On  the  same  day,  an 
act  was  passed  "  to  prevent  the  issuing  of  individual  printed  or 
lithographed  notes;"  and  the  train  of  currency  measures  for  the 
session  was  completed  by  another  act  passed  on  the  same  day, 
and  entitled  "An  act  to  Sustain  the  Currency  of  the  Country." 
This  declared  that  "nothing  but  gold  and  silver,  or  promissory 
notes  of  this  government,  should  be  received  in  payment  of  duties 
on  goods  imported,  nor  shall  any  bank-notes  be  received  in  pay 
ment  of  any  dues  to  the  Government  of  Texas.'' 

This  left  audited  drafts  receivable  for  dues  on  lands,  and  direct 
taxes,  but  they  wrere  in  a  form  so  ill  adapted  to  circulation  that 
but  few  of  them  found  their  way  into  Eastern  Texas,  the  best- 


THE  FISCAL  HISTORY  OF  TEXAS.  75 

settled  and  wealthiest  portion  of  the  country,  and  where  alone  the 
people  had  much  ability  to  pay  taxes;  and  as  these  people  had 
not  audited  drafts  on  hand,  they,  as  a  general  rule,  paid  no  taxes 
at  all. 

To  the  soldiers,  this  Congress  was  very  liberal,  so  far  as  grants 
of  land  were  concerned.  As  there  was  much  difficulty  in  recon 
ciling  the  various  conflicting  laws,  and  as  the  allowance  did  not 
bear  an  equal  proportion,  in  many  cases,  to  the  services  rendered, 
an  act  was  passed,  Dec.  4th,  granting  to  all  those  who  had  served 
in  the  army  three  months,  three  hundred  and  twenty  acres ;  to 
those  who  had  served  six  months,  six  hundred  and  forty ;  to  those 
who  had  served  nine  months,  nine  hundred  and  sixty;  and  to 
those  who  had  served  twelve  months  or  upwards,  twelve  hundred 
and  eighty.  By  an  act  of  Dec.  21st,  a  bounty  of  six  hundred  and 
forty  acres  was  bestowed  on  each  man  who  had  been  in  the  battle 
of  San  Jacinto.  And  by  another,  passed  Dec.  18th,  a  league  of 
land  was  bestowed  on  each  and  every  person  who  had  been  "per 
manently  disabled  by  loss  of  eye,  arm,  or  limb,  or  such  other 
bodily  injury  as  would  incapacitate  him  for  bodily  labor,  by 
wounds  received  in  the  service  of  Texas." 

The  agent  who  had  been  sent  to  itinerate  in  the  United  States 
to  sell  land-script,  Mr.  J.  K.  Allen,  having  been  as  unsuccessful  as 
the  local  agents  at  New  Orleans  and  Mobile,  an  act  was  passed, 
Dec.  14th,  peremptorily  recalling  him,  and  requiring  him,  within 
four  months  from  January  1st,  to  surrender  to  the  Secretary  of 
the  Treasury  all  the  land-script  in  his  possession,  or  else  be  con 
sidered  guilty  of  a  high  misdemeanor. 

There  is  something  exceedingly  amusing  in  the  wrath  of  the 
Texan  authorities  towards  those  who  were  appointed  to  sell  their 
land-script.  They  sent  men  abroad  to  sell  that  which  had  little 
or  no  value  at  home.  That  they  might  make  these  sales,  they 
sent  them  into  the  United  States — a  country,  the  people  of  which 
had,  in  one  or  two  years,  bought  as  much  wild  land  from  their  own 
government  as  they  could  bring  into  cultivation  in  ten  or  twenty 
years.  Had  the  effort  been  made  in  the  height  of  the  banking 
infatuation,  some  success  might  have  crowned  it,  for  men  could 
then  have  been  found  who  would  have  bought  lands  in  Patagonia, 
if  any  there  had  been  offered  for  sale.  But  when  the  Texan  land- 
agents  made  their  appearance  in  the  market,  everything  was  top- 


76  THE  FISCAL  HISTOKY  OF  TEXAS. 

pling,  and  everything  soon  tumbled  over.  Then  the  most  fertile 
lands  could,  in  many  places,  be  bought  "for  a  mere  song."  Yet, 
when  there  was  no  sale  for  lands  in  a  country  in  which  there  was 
a  well-established  government,  and  in  which  an  orderly  state  of 
society  prevailed,  the  Texan  authorities  attempted  to  sell  land  in 
a  country  which  was  then  little  better  than  a  military  common 
wealth,  which  was  still  contending  for  its  independence,  and  in 
but  few  parts  of  which  was  good  order  established.  They  looked 
upon  their  land-script  as  "  a  cash  article,"  charged  their  agents 
with  it  as  if  it  had  been  so  much  money,  and  then  drew  upon  them 
for  such  amounts  as  their  necessities  required. 

Speaking  of  the  agency  at  Mobile,  Henry  Smith,  Secretary  of 
the  Treasury,  said,  in  his  report  of  April  18th,  1837 : — 

"All  the  drafts  made  on  that  agency  were  drawn  contingently,  and 
agreeably  to  the  principles  of  commercial  transactions,  not  liable  to  protest, 
unless  specially  made  so  by  the  act  of  the  agent.  Why  that  agency  has 
caused  so  many  drafts  to  be  protested,  contrary  to  their  tenor,  and  contrary 
to  special  and  positive  instruction,  is  as  unaccountable  to  this  department 
as  it  is  injurious  to  the  faith  and  credit  of  the  government.  And,  inasmuch 
as  the  agencies  spoken  of  have  not  only  cramped  our  energies  and  created 
distrust  at  home,  but  paralyzed  and  ruined  our  credit  abroad,  I  deem  it 
high  time  that  the  government  should  institute  an  investigation  into  their 
conduct,  and  withdraw  their  misplaced  confidence.  Notwithstanding  these 
agencies  must  have  greatly  over  half  a  million  of  government  means  in 
their  hands,  counting  the  land-script  only  at  the  minimum  price,  still  these 
means,  instead  of  being  made  available  to  the  government,  seem  to  be  tied 
up  in  speculation,  and  entirely  beyond  their  control." 

Equal  plainness  of  speech  did  Henry  Smith  use  in  speaking  of 
the  Toby  Agency  at  New  Orleans,  and  Samuel  Houston,  Presi 
dent  of  the  Republic,  in  his  message  of  Nov.  21st,  after  saying  of 
them  what  we  have  already  quoted  (page  72),  added  something 
about  their  "  having  given  no  security  so  as  to  insure  accounta 
bility,  and  furthermore  [were]  placed  beyond  the  jurisdiction  of 
ourselves" — i.  e.  "irresponsible  to  the  Executive." 

What  summary  punishment  President  Houston  would  have  in 
flicted,  if  he  had  had  these  agents  within  his  jurisdiction,  must  be 
left  to  conjecture.  But  the  most  severe  penalties  would  not  have 
enabled  them  to  sell  the  land-script.  The  wonder  is,  not  that  they 
sold  so  little,  but  that  they  sold  any.  The  probability  is  that, 
when  they  did  sell,  it  was  not  for  money,  but  for  articles  needful 
to  the  army  and  navy  of  Texas ;  and  if  they  got  in  this  way  ten 


THE  FISCAL  HISTORY  OF  TEXAS.  77 

cents  an  acre  (specie  value),  they  got  the  full  value  of  the  com 
modity  in  a  foreign  country. 

The  grand  act  of  the  session  was,  after  all,  "  the  act  to  reduce 
into  one  act,  and  to  amend  the  several  acts  relating  to  the  estab 
lishment  of  a  general  land-office."  It  filled  more  than  fourteen 
pages ;  and  provided  for  the  opening  of  the  land-offices  for  first- 
class  claimants — that  is,  for  old  settlers  and  soldiers — on  the  first 
Thursday  of  February,  1838,  and  for  others  in  six  months  after 
wards. 

President  Houston,  as  usual,  vetoed  the  bill,  and  the  Congress, 
as  usual  in  measures  that  promised  to  afford  opportunities  for  land- 
speculation,  passed  it  on  the  14th  of  December,  in  defiance  of  his 
veto :  the  Senate  unanimously,  and  the  House  by  a  vote  of  26  to  2. 


CHAPTER    XI. 

ADJOURNED    SESSION  OF  SECOND  CONGRESS:    APRIL  9,  1838,  TO  MAY 

24,  1838. 

Treasury  notes  at  par — Reasons  for  this — New  issues  authorized — The  loan  act 
modified — Increase  of  public  expenditures. 

WHEN  the  adjourned  session  of  the  Second  Congress  com 
menced,  treasury  notes  had  been  about  six  months  in  circula 
tion.  For  a  time  they  were  at  par  with  specie,  or  nearly  at  par. 
This  may  surprise  the  reader.  Audited  drafts,  which  were  as 
much  pledges  of  the  faith  of  the  government  as  were  treasury 
notes,  had  been  afloat  for  months.  They  were  receivable  for  dues 
on  the  public  lands,  for  direct  taxes,  and  for  a  time  for  customs. 
Yet  so  far  were  they  from  becoming  a  currency,  that  they  did  not 
even  become  a  regular  vendible  commodity.  They  were  not 
quoted  in  the  prices  current  as  flour,  bacon,  and  cotton  were 
quoted.  In  May,  1837,  when  Governor  Smith  proposed  to  fund 
them,  they  "  possessed  but  a  nominal  value,  say  fifteen  cents  in 
the  dollar."  By  the  1st  of  November,  the  amount  of  these  out 
standing  audited  drafts  was  increased  to  about  a  million,  a  measure 
which  we  may  be  sure  did  not  tend  to  raise  their  market  value. 


78  THE  FISCAL  HISTORY  OF  TEXAS. 

Yet  the  government  then  resolved  to  add  another  half  million  to 
the  public  debt,  and  treasury  notes,  the  evidences  of  this  new  debt, 
were  for  a  time  of  equal  or  nearly  equal  value  with  silver  ! 
For  this  several  reasons  may  be  assigned: — 

1.  The  treasury  notes  were  for  round  sums,  and  for  amounts 
which  made   them  convenient  for  circulation,  namely,  from  one 
dollar  to  one  hundred  dollars.     Audited  drafts  were  for  whatever 
the  claim  of  the  public  creditor  might  amount  to;  frequently  for 
large  sums,  and  generally  for  odd  numbers  of  dollars  and  cents. 
To  pass  them  from  hand  to  hand  required  a  calculation  which 
they  who  had  them  to  pay  or  receive  did  not  find  it  always  easy 
to  make. 

2.  These  treasury  notes  were  in  the  form  of  bank-notes,  a  form 
of  money  with  which  most  of  the  people  of  Texas  had  been  familiar 
from  infancy ;   and,  indeed,  the  only  form  of  money  with  which 
some  of  them  were  much  conversant. 

3.  They  bore  a  rate  of  interest  which  was  easily  calculated,  and 
a  rate  (ten  per  cent.)  which  was  sufficient  to  cause  them  to  be 
hoarded  by  such  as  had  faith  in  their  ultimate  redemption.     Some 
of  the  audited  drafts  bore  interest,  but  the  rate  of  them  was  only 
eight  per  cent. 

4.  Texas  was  at  this  time  flooded  with  the  notes  of  the  banks  of 
the  South- Western  States,  many  of  which  were  at  ruinous  rates  of 
depreciation ;  and  which  rates  were,  moreover,  always  fluctuating. 
The  want  of  some  medium   that  would  regulate  prices  was  much 
felt.     One  kind  of  irredeemable  paper  is  much  to  be  preferred  to 
many  kinds. 

5.  About  this  time  the  laws  for  raising  a  revenue  from  customs 
began  to  be  effective.     In  the  quarter  ending  September  30,  the 
gross  amount  that  had  accrued  was  about  sixty  thousand  dollars, 
which  was  at  the  rate  of  two  hundred  and  forty  thousand  dollars 
a  year.     This  increase  of  revenue  would  have  sustained  the  value 
of  audited  drafts  if  they  had  been  still  receivable  for  duties  on 
imports;  but  by  one  of  those  frequent  changes  of  public  tenders 
which  disgrace  the  fiscal  history  of  Texas,  they  were  no  longer  so 
receivable.      The  whole  revenue  from  customs  was   applied   to 
sustain  the  credit  of  treasury  notes. 

6.  A  market  was  found  for  these  treasury  notes  in  the  United 
States.     An  American  is  very  careful  how  he  parts  with  his  silver 


THE  FISCAL  HISTORY  OF  TEXAS.  79 

dollars  or  his  gold  eagles,  especially  if  the  bonds  offered  in  ex 
change  be  in  such  large  amounts  as  one  thousand  dollars.  But 
reduce  the  denominations  of  the  public  securities  to  one  hundred 
dollars  or  less,  and  at  the  same  time  afford  him  an  opportunity  of 
making  what  he  regards  as  a  good  sale  for  his  commodities,  and 
the  temptation  is  too  strong  for  him  to  resist  it.  By  issuing  notes 
of  as  low  a  denomination  as  one  dollar,  the  Texan  Government 
afforded  to  all — down  to  the  very  negroes  in  the  New  Orleans 
markets — opportunities  for  speculating  in  Texan  securities.  In 
this  indirect  way,  the  Government  of  Texas  obtained  supplies  for 
the  army  and  navy,  and  the  merchants  of  Texas  replenished  their 
warehouses. 

Admirable  would  this  system  have  been  if  it  could  only  have 
been  sustained.  But  it  contained  in  itself  the  principles  of  its 
own  destruction.  The  notes  soon  began  to  depreciate ;  and  even 
after  the  depreciation  was  as  great  as  fifty  per  cent,  at  New 
Orleans,*  a  bill  was  reported  authorizing  an  additional  issue  of 
one  hundred  and  fifty  thousand. 

This  bill,  which  was  modestly  entitled  "  an  Act  to  Define  and 
Limit  the  Issue  of  Promissory  Notes,"  was  passed  in  the  House 
by  a  vote  of  twenty-four  to  seven,  and  in  the  Senate,  where  the 
amount  was  increased  to  one  million,  without  a  formal  division. 

The  President  refused  to  sign  it,  and  gave  his  reasons,  on  the 
12th  of  May,  in  a  message  which  filled  six  pages.  In  it  he  says : — 

"When  the  (treasury  note)  currency  was  projected,  both  the  govern 
ment  and  the  country  were  without  resources.  National  existence,  and 
freedom,  and  imperishable  glory  had  been  achieved,  but  the  struggle  had 
left  us  destitute  and  naked.  There  were  no  banks!  there  was  no  money! 
our  lands  could  not  be  sold,  and  the  public  credit  was  of  doubtful  cha 
racter  ! 

"  To  avoid  the  absolute  dissolution  of  the  government,  it  became  neces 
sary  to  resort  to  some  expedient  that  might  furnish  temporary  relief. 
This  could  be  only  effected  by  creating  a  currency  that  should  command 
some  degree  of  credit  abroad. 

"It  was  hoped  and  believed,  that  if  a  small  issue  of  government  paper 
was  made  with  specific  means  of  redemption  pointed  out,  which  appeared 
to  be  ample  and  well  guaranteed,  and  the  government  should  evince  a  pru 
dent  and  discreet  judgment  in  its  management,  it  would  command  such 
articles  in  the  market  of  the  United  States  as  were  indispensable  to  the 
country. 

"The  result  has  justified  the  expectation." 

*  According  to  General  Hunt,  the  notes  passed  at  this  time  at  eighty-five  to  sixty- 
five  cents  in  the  dollar  in  Texas. 


80  THE  FISCAL  HISTORY  OF  TEXAS. 

Here  we  find  that  it  was  calculated  from  the  beginning  that  the 
means  of  the  citizens  of  the  United  States  would  be  drawn  from 
them  through  the  instrumentality  of  these  treasury  notes. 

u  The  government  will  never  be  able,  by  all  the  issues  it  can  make,  to 
satisfy  the  demands  of  private  speculation  and  interest.  The  vast  issue  of 
all  the  banks  in  the  United  States;  in  their  most  extended  condition,  failed 
to  attain  this  object.  *  *  * 

"  There  has  not  probably  been  in  circulation  at  any  time  more  than  a 
half  million  of  dollars.  The  present  bill  requires  the  Secretary  of  the 
Treasury  to  increase  the  issue  to  a  million.  No  time  or  discretion  is 
allowed  to  that  officer.  The  circulation  of  the  country  is  to  be  doubled  in 
as  little  time  as  is  required  to  issue  the  paper." 

A  bill  was  then  reported  "to  authorize  the  President  to  reissue 
the  promissory  notes  of  the  government."  After  having  been 
bandied  about  for  some  time  between  the  House  and  the  Senate, 
it  was  finally,  May  18,  approved  by  the  President. 

It  authorized  and  required  him  "  to  have  reissued,  and  continue 
to  have  reissued"  the  said  promissory  notes  as  they  returned  into 
the  treasury,  until  all  the  appropriations  made  by  government 
should  be  satisfied  ;  and  he  was  authorized  to  increase  the  issues  to 
an  amount  not  exceeding  one  million  dollars,  if  in  his  opinion  the 
situation  of  the  Republic  should  be  such  as  to  require  it.  The  bill 
further  appropriated  one  hundred  and  fifty  thousand  dollars  in 
promissory  notes  for  the  payment  of  civil  list  claims,  two  hundred 
thousand  for  military  claims,  and  one  hundred  thousand  for  naval 
claims.  But  it  required  all  those  who  presented  military  and 
naval  claims  to  take  an  oath  that  they  were  the  original  holders 
thereof.  Thus  absurdly  did  the  law  draw  a  line  of  distinction 
between  different  classes  of  public  claimants. 

A  bill  was  also  passed,  May  16,  "  authorizing  the  payment  of 
the  interest  of  the  funded  debt"  in  other  evidences  of  debt,  i.  e. 
in  treasury  notes.  And  another,  May  24,  opening  the  land- 
offices,  from  and  after  the  first  Thursday  of  August,  1838,  to 
holders  of  land- script.  Also  an  act,  May  15,  to  raise  a  corps  of 
cavalry  two  hundred  and  eighty  strong,  and  appropriating  fifty 
thousand  dollars  for  their  use ;  thus  completing  the  appropriation 
of  the  additional  five  hundred  thousand  dollars  the  President  was 
authorized  to  issue. 

All  the  efforts  to  borrow  money  under  the  five  million  act  having 
proved  ineffective,  another  was  passed  this  session,  May  16,  modi 
fying  some  of  its  provisions. 


THE  FISCAL  HISTORY  OF  TEXAS.  81 

By  one  section  power  was  given  to  the  commissioners  "  to  sell  the  bonds 
for  the  notes  of  any  bank  or  banks  whose  paper  shall  be  at  par  with  the 
best  bank  paper  in  the  city  of  New  York  or  Philadelphia ;  and  further,  to 
stipulate  that  the  notes  of  such  bank  or  banks,  purchasing  such  bonds  to 
the  amount  of  $100,000,  should  be  received  in  payment  of  all  public  dues, 
so  long  as  said  bank  or  banks  should,  in  the  judgment  of  the  Government 
of  Texas,  be  of  good  character,  and  worthy  of  confidence." 

The  reader  will  see  the  bearing  of  this,  when  he  calls  to  mind  the 
fact  that  the  banks  of  Philadelphia  had  not  then  resumed  specie 
payments. 

By  another  section,  it  was  made  "  the  duty  of  the  commissioners 
to  contract  with  the  Bank  of  the  United  States  of  Pennsylvania 
(if  practicable),  if  not,  with  the  Manhattan  Bank  of  New  York,  or 
the  Union  Bank  of  Louisiana,  to  act  as  fiscal  agent  of  the  Re 
public  of  Texas." 

The  Secretary  of  the  Treasury,  Mr.  Smith,  sent  the  project  of 
this  law  to  the  House,  requested  that  it  might  be  adopted  without 
amendment  or  alteration,  and  appears  to  have  been  therein  grati 
fied. 

The  Secretary  further  informed  the  House  that  the  engraved 
notes  had  arrived,  and  would  be  substituted  for  the  printed  notes, 
which  had  thus  far,  from  necessity,  been  exclusively  used. 

Col.  J.  K.  Allen,  the  itinerant  agent  for  vending  land  script 
in  the  United  States,  appeared  at  the  treasury  within  the  time 
stipulated  by  law,  and  thus  escaped  the  severe  penalties  with  which 
he  was  threatened  in  case  of  disobedience. 

The  First  Auditor  made  a  report,  in  which  he  stated  that,  from 
the  18th  of  November,  1837,  to  the  13th  of  April,  1838,  he  had 
audited  military  claims  to  the  amount  of  $586,988  97.  From 
this,  it  appears  that,  in  five  months,  the  audited  claims  for  a  single 
branch  of  the  service,  were  equal  to  one  half  of  the  amount  audited 
in  the  two  previous  years  for  all  branches  of  the  service,  and  these 
the  years  of  most  active  hostility.  But  we  need  not  dwell  on  this 
point.  The  reader  knows  that  issues  of  government  paper-money 
always  increase  government  expenditures. 

6 


82  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    XII. 

THIRD   CONGRESS  I    FROM   NOVEMBER    5   TO    DECEMBER  11,  1838. 

Fraudulent  land  claims — The  navy  totally  destroyed — Extensive  entries  of  lands — 
Income  and  expenses — Sanguine  expectations  of  revenue — Imports  and  exports — 
Plan  for  creating  a  creditor  interest  in  the  United  States  friendly  to  Texas. 

THE  third  Congress  assembled  at  Houston  November  5,  1838. 
The  Secretary  of  War  stated,  in  his  report,  that  2,990,000  acres 
of  bounty  land  had  been  issued  up  to  the  15th  of  October  : — 

"  The  numerous  and  varied  claims  for  land  due  to  discharged  soldiers, 
has  occupied  almost  exclusively  the  attention  of  the  department,  and  the 
adoption  of  some  rules  for  its  guidance  has  met  with  much  recrimination ; 
but  unquestionably  has  resulted  in  the  correction  of  frauds  attempted  on 
the  government.  In  consequence  of  the  defect  in  the  laws  regulating 
bounty  lands,  the  soldier  has,  in  many  instances,  claimed  the  amount  twice, 
say  for  six  months,  or  two  terms  of  service ;  that  is,  if  enlisted  for  a  definite 
period,  he  obtains  his  discharge  and  receives  his  land,  and  by  re-enlisting 
for  another  period,  claims  the  same  amount  again." 

From  the  report  of  the  Secretary  of  the  Navy,  it  appeared  that 
this  branch  of  the  national  defence  had  been  totally  destroyed  ; 
one  of  the  vessels  composing  it  "  being  wrecked  in  coming  into 
port,  and  the  other  destroyed  by  the  October  gale  of  1837." 
"  The  officers  and  men  attached  to  the  navy  were  disbanded, 
agreeably  to  your  Excellency's  order,  retaining  the  number  speci 
fied."  Speaking  of  prize-money,  the  Secretary  says  :  "  The  sailors 
of  this  Republic  have  received  that  boon  in  but  one  instance ;  the 
portion  of  each  not  amounting  to  more  than  seven  dollars  and 
seventy-six  cents." 

The  Commissioner- General  of  the  Land-Office  reported  that  the 
number  of  certificates  issued  by  the  several  boards  of  land  com 
missioners,  and  recorded  up  to  November  1,  was  10,890,  amounting 
to  26,242,199  acres.  According  to  this  statement,  the  land  entries 
that  had  been  made  in  the  nine  months  that  had  elapsed  since  the 
opening  of  the  land-offices,  covered  an  area  larger  than  the  whole 
State  of  Ohio.  These  entries  did,  indeed,  include  many  of  the 


THE  FISCAL  HISTORY  OF  TEXAS.  83 

grants  of  the  old  settlers,  but  it  must  still  be  admitted  to  be  a 
pretty  extensive  land  business  for  a  Republic  that  had  then,  ac 
cording  to  computation,  a  population  of  no  more  than  fifty  thousand 
to  sixty  thousand  souls. 

On  the  3d  of  November,  the  Secretary  of  the  Treasury,  Henry 
Smith,  made  his  report. 

After  speaking  of  the  agents  for  the  sale  of  land  script,  of  whom 
he  had  nothing  particularly  good  to  say,  he  mentioned  that  the 
whole  amount  of  issues  of  land  script  was  2,193,000  acres,  of  which 
870,400  had  been  returned  by  the  agents,  and  60,800  funded, 
"leaving  1,260,800  acres  to  the  credit  of  this  account." 

The  total  amount  of  audited  claims,  not  for  the  year,  but  from 
the  beginning  of  the  government,  up  to  September  30,  1838,  he 
stated,  was  : — 

Civil  list,             $326,959  68 

Contingent,          ....         ,    ,     .  170,58979 

Naval, 187,169  42 

Military,     ...                           .  1,426,895  81 

Total, $2,061,614  70 

The  customs  that  had  accrued  (besides  those  for  one  quarter  at 
Matagorda),  amounted,  up  to  September  30,  to  $335,955  83  ; 
leaving,  after  deducting  $57,821  27  for  expenses  of  collection,  a 
net  revenue  of  $278,134  56.  This,  it  should  be  remembered,  was 
not  for  the  year,  but  for  a  period  of  about  fifteen  months,  counting 
from  the  time  in  which  the  custom-house  had  been  brought  into 
successful  operation. 

On  paper,  the  finances  of  Texas  began  to  appear  to  flourish; 
but  he  who  knew  that  all  these  dollars  were  mere  treasury  note 
dollars,  depreciated  many  per  cent,  below  par,  was  the  victim  of 
no  illusion. 

In  relation  to  the  public  debt,  he  remarked  that  military  script 
to  the  amount  of  $396,800,  and  land  script  to  the  amount  of  $30,400, 
making,  together,  $427,200,  had  been  funded  in  ten  per  cent, 
stocks.  . 

Of  the  direct  taxes,  the  Secretary  could  give  no  satisfactory  ac 
count  ;  but,  said  he,  "  the  probable  amount,  however,  will  not,  in 
my  opinion,  fall  short  of  $500,000  for  the  year  1837-1838." 

The  land  dues,  it  was  admitted,  had  not  proved  as  lucrative  as 


84  THE  FISCAL  HISTORY  OF  TEXAS. 

had  been  hoped  for,  only  a  very  trifling  amount  having  been  re 
ceived  since  the  opening  of  the  land-offices,  but  it  was  confidently 
expected  that  this  one  branch  of  the  revenue  would  yield,  in  a 
short  time,  $237,200. 

The  treasurer,  in  his  report,  presented  a  very  respectable-looking 
sheet ;  total  receipts,  $1,023,071  48  ;  total  disbursements,  $825,- 
699  14.  But  the  receipts,  when  analyzed,  were  found  to  consist 
of  $875,739  53  from  the  Secretary  of  the  Treasury  in  treasury 
notes  ;  some  $8,000  or  $9,000  from  other  public  officers ;  only 
$133,649  98  from  customs  ;  $1,500  from  sales  of  lot  on  Galveston 
Island  ;  $3,195  54  from  prize-money ;  and  from  land-dues  and 
direct  taxes,  nothing.  It  is  unnecessary,  we  presume,  to  remind 
the  reader  that  what  revenue  was  received,  was  in  the  government's 
own  paper. 

Appended  to  this  report,  we  have  an  abstract,  showing  the 
amount  of  imports  and  exports,  up  to  September  30,  1838  : — 

"  Total  amount  of  goods  imported,         .         .       $1,740,376  87 
"  "  "        exported,          .          .  183,323  00 

"  Balance  of  trade  against  the  Republic,         .         1,557,053  87" 

Balance  of  trade  against  the  Republic  !  The  Texans  had  been 
carrying  on  a  most  profitable  trade.  They  had  been  exporting 
their  land  script  and  their  treasury  notes,  and  receiving  in  ex 
change  for  them,  from  "  aliens,"  i.  e.  citizens  of  the  United  States, 
the  necessaries  and  comforts  of  life,  and  the  munitions  of  war.  If 
Texas  could  only  have  made  this  trade  a  permanent  one,  she  would 
have  been  under  no  necessity  of  cultivating  either  her  cotton  fields, 
or  her  sugar  lands. 

On  the  13th,  a  resolution  was  adopted  requesting  the  Secretary 
of  the  Treasury  to  give  his  views  on  the  propriety  of  increasing 
the  issues  of  promissory  notes ;  on  the  effects  which  the  abolition 
of  the  tariff  would  have  on  the  credit  of  the  currency ;  and  on 
other  financial  topics. 

On  the  29th,  the  Secretary  made  a  long  reply,  in  which  he 
began  with  complaining  that  the  Texan  Congress  had  not  received 
his  suggestions  with  that  deferential  respect  which  the  British 
Parliament  is  accustomed  to  pay  to  the  suggestions  of  the  Chan 
cellor  of  the  Exchequer. 

"As  the  head  of  the  Treasury  Department,  I  have  ever  considered  it  my 


THE  FISCAL  HISTORY  OF  TEXAS.  85 

duty  to  devise  and  recommend  the  best  ways  and  means  to  create  a  com 
petent  revenue  for  the  support  of  the  government,  and  in  a  manner  which 
would,  in  my  opinion,  be  the  least  burdensome,  and  as  such  the  least  ob 
jectionable  to  the  governed.  In  assuming  this  position,  though  the  Congress 
have  not  thought  proper  to  pass  any  law  defining  the  duties  of  my  depart 
ment,  yet,  by  implication  and  analogy,  I  am  bound  to  arrive  at  that  conclu 
sion.  It  is  a  matter  well  understood  that  our  civil  institutions  are  based 
on  the  same  principles  as  those  of  the  United  States  of  the  north,  who  have, 
in  a  great  measure,  copied  after  Great  Britain,  their  ancestors,  which  is 
going  far  enough  back  for  my  present  purposes.  By  reference  to  the  laws 
and  statistics  of  England,  it  will  be  found  the  Minister  of  Finance  is  re 
quired  to  lay  before  Parliament  the  state  of  the  funds  in  exact  detail,  and  to 
suggest  such  measures  as  he  may  deem  necessary  concerning  them;  and 
should  they  object  to  any  of  his  views,  they  must  refer  the  necessary  amend 
ments  again  to  him,  in  order  to  have  his  views  on  the  amendments,  for  the 
purpose  of  preventing  any  injurious  clashing  of  laws  and  acts  with  some  other 
branch  of  the  finance.  In  consequence  of  the  strict  adherence  to  this  con 
cert  of  action,  notwithstanding  the  immense  and  apparently  overwhelming 
debt  of  that  nation,  by  strictly  and  carefully  maintaining  the  rights  of  indi 
viduals  sacred,  the  stocks  of  Great  Britain  are  constantly  at  or  above  par. 
[A  mistake.]  This  courtesy  has,  however,  not  been  heretofore  extended  to 
me,  nor  have  I,  with  all  my  exertions,  been  able  to  succeed,  except  partially, 
in  any  project  which  I  have  introduced  to  Congress." 

Mr.  Smith  then  reproaches  the  Congress  for  having  thwarted 
his  favorite  plan  for  funding  the  outstanding  audited  drafts.  After 
this  he  denounces  the  treasury  note  issues,  not  because  he  had  any 
objections  to  such  kind  of  medium,  either  in  the  abstract  or  the 
concrete,  for  he  was  not  a  hard-money  man,  but  because  these  notes 
being  receivable  for  all  public  dues,  left  him  without  gold  and  silver 
to  pay  the  interest  on  the  funded  debt,  and  because  they  had  been 
issued  in  such  a  way  as  to  make  an  invidious  distinction  between 
the  public  creditors.  In  the  existing  state  of  things  he  thought 
that  the  best  that  could  be  done  was  to  fund  all  the  outstanding 
claims  of  every  description,  including  the  treasury  notes  bearing 
interest,  and  issue  others  bearing  no  interest. 

"  The  stock  created  as  above  recited  would  float  off  to  the  United  States, 
and  even  to  Europe,  and  fall  into  the  hands  of  bankers  and  capitalists,  thereby 
increasing  a  foreign  interest  in  our  favor;  for  it  is  with  governments  as  with 
individuals,  and  I  presume  it  is  a  matter  well  understood  in  banking  trans 
actions,  that  banking  institutions  will  not  permit  a  firm  or  an  individual  to 
fail  who  has  become  largely  indebted  to  them,  so  long  as  it  is  possible  to 
sustain  them,  or  at  least  till  they  can  be  thrown  off  on  some  other  institu 
tion  ;  for  the  ties  of  interest  are  as  a  threefold  cord,  and  not  easily  broken/' 

From  this,  it  is  evident  that  Mr.  Smith  had  in  his  composition 
a  spice  of  "  the  wisdom  that  is  of  this  world,"  and  the  result  affords 


86  THE  FISCAL  HISTORY  OF  TEXAS. 

an  additional  confirmation  that  "  the  children  of  this  world  are 
in  their  generation  wiser  than  the  children  of  light."  Just  as 
he  predicted,  the  stock  floated  off  to  the  United  States,  and  an 
interest  was  thereby  created  which  yielded  important  aid  to  the 
Texans  in  their  favorite  measure  of  annexation,  and  aid  not  less 
important  when  the  question  arose  about  the  settlement  of  the 
boundary  line  between  Texas  and  New  Mexico.  By  these  measures, 
taken  together,  the  value  of  Texan  lands  has  been  increased  many 
fold ;  and  neither  of  these  measures  could  have  been  carried  at  the 
time  and  in  the  manner  in  which  they  were  carried,  if  there  had 
not  been  persons  in  the  United  States  who  had  a  deep  interest  in 
Texan  securities. 

Mr.  Smith  objected  to  an  abolition  of  the  tariff,  and  even  to  any 
immediate  modification  of  it.  "  All  laws  calculated  to  alter  or 
modify  the  tariff  should  not  go  into  effective  operation  for  at  least 
one  year  after  the  date  of  their  passage,  by  which  time  the  people, 
both  at  home  and  abroad,  would  be  prepared  to  meet  them,  without 
sustaining  any  very  serious  loss  or  damage." 

He  then  proceeded  to  cipher  out  a  revenue  for  the  Texan  govern 
ment,  to  wit : — 

1837.  Old  land  dues     .         .  $300,000 
New  land  dues    .         .         .          312,659 

Direct  taxes        .         .         .  185,506         798,165 

1838.  Direct  taxes         .         .         .          200,000 

Revenue  from  imports          .          335,955         535,955 

1839.  Direct  taxes         .         .         .          250,000 

Import  duties      .         .         .          400,000         650,000 

Making  a  snug  little  revenue  for  the  three  years  of  $1,984,120; 
and  so  neatly  did  he  arrange  his  figure  work  as  to  persuade  himself 
that,  on  the  30th  of  September,  1839,  there  would  be  a  balance  in 
the  treasury  of  $6,372  34,  after  redeeming  all  the  promissory  notes 
then  in  circulation.  "Most  of  the  foregoing  estimates  are  made 
from  correct  data,  and  the  balance  is  by  no  means  overrated." 

On  the  16th  of  November,  1838,  an  act  was  passed  requiring 
the  President  to  issue  one  hundred  thousand  dollars,  in  the  promis 
sory  notes  already  authorized  for  the  defence  of  the  frontier,  and 
to  quell  the  insurrection  then  existing  among  the  Indians  and  Mexi 
cans  in  the  Nacogdoches  Department ;  and  this  was  the  last  fiscal 
act  of  any  importance  signed  by  Samuel  Houston,  during  his  first 
presidential  term. 


THE  FISCAL  HISTORY  OF  TEXAS. 

>£^^nP^|^ 


87 


CHA 


R     XIII 


THIRD  CONGRESS:  FROM  DECEMBER  10,  1838,  TO  JAN.  26,  1839. 

President  Lamar's  views  of  exchequer  bills  and  treasury  notes  —  He  recommends  a 
national  bank,  founded  on  the  credit  and  resources  of  the  Government  of  Texas 
—  Government  banking  the  worst  form  of  banking  —  Refusal  to  make  treasury 
notes  a  legal  tender  for  private  debts  —  Authority  given  to  raise  additional  troops  — 
The  steam-vessel  "Zavalla"  purchased  —  A  contract  for  the  purchase  of  other  ves 
sels  of  war  recognized  by  law  —  Stock  books  again  opened  for  funding  the  floating 
debt  —  Act  to  establish  a  sinking  fund  —  Officers  of  government  required  to  re 
ceive  their  dues  in'  treasury  notes. 

MIRABEAU  B.  LAMAR,  who  succeeded  General  Houston  as  Pre 
sident,  sent  to  the  two  Houses,  December  24,  a  message  which 
filled  more  than  twenty-eight  pages;  about  eleven  of  these  were 
devoted  to  banking,  and  its  kindred  topics. 

"  The  exchequer  bills  of  England,"  said  the  new  President,  "  the 
assignats  of  France,  and  the  treasury  bills  of  the  United  States, 
furnish  memorable  examples  of  the  inability  of  the  most  powerful 
and  opulent  governments  to  establish  a  good  practical  circulating 
medium  on  their  own  credit  alone,  without  the  facilities  of  prompt 
redemption."  He  then  denounced  corporate  banks  "as  having 
been  productive  of  more  evil  than  good,  and  as  having  exerted  a 
pernicious  influence  on  society."  After  this  followed  plaudits  of 
the  United  States  Bank,  such  as  none  but  the  most  prejudiced 
partisan  could  utter,  and  an  excuse  for  which,  on  the  part  of  Mr. 
Lamar,  is  to  be  found  only  in  his  ignorance  of  the  history  of  that 
institution.  So  complete  was  this,  that  he  supposed  that  the  bank 
was  established  "  at  the  commencement  of  the  last  war  between 
the  United  States  and  Great  Britain,"  when  the  fact  was,  that  it 
did  not  commence  operations  till  three  years  after  the  close  of 
the  war.  4,  ' 

President  Lamar  then  gave  his  own  plan,  which  was  that  of  a 
national  bank,  founded  exclusively  on  the  credit  and  resources  of 
the  government,  and  the  control  of  which  should  be  exclusively 


88  THE  FISCAL  HISTORY  OF  TEXAS. 

in  the  government;  the  directors  to  be  elected  by  joint  bal 
lot  of  the  two  Houses,  and  the  president  and  cashier  to  be  ap 
pointed  by  the  President  of  the  Republic,  by  and  with  the  advice 
and  consent  of  the  Senate.  This  bank  was  to  be,  at  one  and  the 
same  time,  a  fiscal  agent  for  government,  an  exchange  regulator 
for  those  who  had  exchanges  to  make,  an  office  of  deposit  for  those 
who  had  surplus  cash  on  hand,  a  loan  office  for  planters,  a  bank  of 
discount  for  merchants,  and  a  paper  money  manufactory  for  the 
benefit  of  all  together.  "  The  bank  would,  of  course,  be  extended 
by  branches  established  at  every  convenient  and  suitable  part  of 
the  Republic." 

As  the  Republic  of  Texas  had  already  converted  itself  into  a 
bank  of  issue,  by  emitting  promissory  notes,  one  would  think  that 
this  might  have  satisfied  President  Lamar ;  but  it  did  not.  His 
views  are  explained  in  the  following  extract  : — 

"  An  admixture  of  private  interests  would  embarrass  its  operations,  with 
out  bringing  equivalent  advantages  to  the  institution.  Such  a  bank,  in 
corporated  for  a  suitable  term  of  years,  founded  on  a  specific  hypothecation 
of  a  competent  portion  of  the  public  domain,  which  should  be  immediately 
appropriated  to  that  purpose,  with  the  additional  guarantee  of  the  plighted 
faith  of  the  nation,  and  an  adequate  deposit  of  specie  in  its  vaults,  would, 
it  is  confidently  believed,  confer  many  eminent  and  continued  blessings 
upon  the  country.  It  would  furnish  an  immediate  and  complete  remedy 
for  the  existing  pecuniary  difficulties,  which  result  entirely  from  the  insuf 
ficiency  and  depreciation  of  our  present  circulating  medium.  A  well  di 
gested  project  of  such  an  institution,  when  fully  propounded  to,  and  under 
stood  by  the  people,  cannot  fail  to  propitiate  a  very  general  approbation, 
and  to  enlist  the  national  pride  of  a  large  majority  of  our  fellow-citizens. 
And  an  institution  having  all  the  elements  of  usefulness  and  prosperity  in 
itself,  and  sustained  by  the  confidence  and  affections  of  an  enlightened  peo 
ple,  can  scarcely  be  supposed  capable  of  degenerating  into  an  instrument  of 
fraud  or  of  oppression,  or  failing  to  realize  the  benefits  expected  from  it. 
The  triple  security  it  would  offer  to  its  creditors,  is  of  the  highest  character, 
and  of  the  most  indubitable  responsibility;  for  it  is  an  approved  maxim, 
that  real  estate  affords  the  best  possible  guarantee  for  the  ultimate  payment 
of  a  debt.  The  pledge  of  a  nation's  faith  will  give  peculiar  solemnity  and 
increased  confidence  to  its  obligations,  and  a  competent  deposit  of  specie  will 
always  be  present,  or  presently  attainable,  to  answer  the  contingent  and  occa 
sional  demands  for  that  article.  It  is  indeed  true  that  real  estate  is  not  suffi 
ciently  commutable  or  transitive  to  answer  the  ordinary  and  daily  purposes  of 
commerce  and  exchange.  These  can  be  accomplished  only  by  specie  itself,  or 
by  that  active  and  undoubted  credit,  of  which  a  known  and  sufficient  deposit 
of  the  metals,  or  something  equivalent  to  them,  is  the  proper  basis.  It  is  be 
lieved  that  the  proposed  bank  would  be  amply  furnished  with  that  equiva 
lent,  and  to  all  necessary  extent  with  the  actual  deposit  itself.  It  is  evi 
dent  that  a  bank  so  constituted,  the  exclusive  property  of  a  stable  and  popu- 


THE  FISCAL  HISTORY  OF  TEXAS.  89 

lar  government,  and  combining  the  three  guarantees  of  land,  specie,  and 
the  public  faith,  would  not  require  to  retain  in  its  vaults  as  large  a  propor 
tion  of  the  dormant  capital  as  is  acknowledged  to  be  indispensable  to  the 
safe  conduct  of  a  private  institution." 

In  supposing  land  to  be  a  proper  basis  for  banking  operations, 
President  Lamar  had  been  anticipated  by  John  Law,  the  author  of 
the  Mississippi  Scheme,  and  by  the  distinguished  founders  of  the 
New  York  Free  Banking  system.  They,  too,  found  that  "  real 
estate  was  not  sufficiently  commutable  or  transitive  to  answer  the 
ordinary  and  daily  purposes  of  commerce  and  exchange;"  and, 
therefore,  proposed  that  people  should  be  allowed  to  coin  their 
broad  acres  into  pieces  of  paper.  Two  of  the  three  articles  that 
formed  President  Lamar's  "triple  security,"  namely,  the  public 
faith  and  the  public  lands,  having  been  already  pretty  well  used 
up  by  the  Republic  of  Texas,  as  a  bank  of  issue,  and  a  bank  for 
borrowing,  it  is  to  be  regretted  that  he  did  not  state  where  the 
third,  that  is,  "the  adequate  deposit  of  specie,"  was  to  come  from. 
Equally  is  it  to  be  regretted  that  he  did  not  distinctly  explain 
what  he  meant  by  the  "  something  equivalent"  which  was  to  serve 
as  so  admirable  a  substitute  for  the  specie  itself.  Everything 
that  can  be  bought  and  sold  is  the  equivalent  of  specie.  Old  fur 
niture  and  old  clothing  are  included  in  this  category,  as  any  one 
may  prove  who  will  make  trial  with  the  Jew  brokers  in  Chatham 
street,  New  York ;  and  so,  also,  are  corn-husks,  and  cotton  seed. 
But  the  probability  is,  that  President  Lamar  did  not  mean  any 
of  these,  or  anything  else  possessing  intrinsic  value.  Neither  did 
he  mean  Texan  securities,  either  public  or  private.  But,  taking 
into  view  the  measures  that  were  then  in  train  to  bring  about  a 
close  connection  between  the  Republic  and  the  Pennsylvania  Bank 
of  the  United  States,  we  are  led  to  the  conclusion,  that  "  that 
equivalent  with  which  the  proposed  bank  would  be  amply  furnish 
ed," 'was  to  consist  of  that  "  active  and  undoubted  credit"  which 
the  Bank  of  the  United  States  was,  on  all  occasions,  so  ready  to 
supply. 

Towards  the  close  of  his  communication,  Mr.  Lamar  made  some 
observations  which  it  may  not  be  amiss  to  quote. 

"  The  control  of  the  circulating  medium  of  a  country  is  as  necessary  to 
its  salutary  administration,  as  is  that  of  any  other  department  of  its  inte 
rests.  If  banking  powers  be  valuable  in  promoting  an  equal  and  safe  cir 
culation,  then  it  is  obvious  that  it  belongs  to  the  government  to  direct  and 


90  THE  FISCAL  HISTORY  OF  TEXAS. 

superintend  the  distribution  and  exercise  of  these  powers.  It  is  a  portion, 
and  one  of  peculiar  interest  too,  of  the  sovereign  authority,  and  to  surren 
der  it  into  the  hands  of  a  few  private,  and,  in  a  political  sense,  irresponsible 
individuals,  would  be  as  repugnant  to  the  true  spirit  of  our  institutions,  as 
to  subject  the  management  of  the  war  and  navy  departments  to  such  par 
tial  and  unpledged  hands.  Private  corporations,  or  private  individuals, 
may  have  interests  diverse  and  incompatible  with  the  nation's,  and  have  as 
little  right  to  be  made  the  fiduciary  agents  of  the  government.  If  it  be 
proper  to  extend  franchise  to  one  class  of  our  fellow-citizens,  comprehend 
ing  generally  but  few  in  number,  why  may  they  not  be  claimed  by  all; 
and  why  throw  impediments  in  the  way  of  a  man  participating  in  them. 
If  a  few  men  may  become  bankers,  and  throw  their  equivocal  and  preca 
rious  paper  currency  on  the  community,  why  not  let  every  man  be  a 
banker,  and  abandon  your  circulating  medium  to  the  illimitable  cupidity  of 
private  speculation.  The  planter,  the  mechanic,  and  the  laborer,  are  as 
much  entitled  to  the  immunities  and  privileges  of  the  government,  as  the 
speculator  or  the  money-dealer.  Let  all  rights  be  equal.  Let  all  trades 
be  free.  The  Constitution  has  so  ordained  it,  and  so  let  us  carry  it  into 
practice.  The  fostering  hand  of  legislation  should  be  extended  to  all  classes 
of  society. 

"  Each  individual  of  a  patriotic  people  cherishes,  supports,  and  defends 
the  government,  and  none  have  an  exclusive  claim  to  reward  or  privileges 
in  the  exercise  of  their  industry.  If  banking  be  profitable,  let  that  profit 
enure  to  the  government.  If  the  people  must  pay  an  interest  for  the  use 
of  money  to  facilitate  their  legitimate  operations,  let  them  bestow  their 
sacrifices,  not  upon  the  mercenary,  but  where  it  will  promote  the  public 
welfare,  and  in  process  of  time  revert  to  their  own  advantage/' 

Truths  misunderstood  or  misapplied  may  do  much  harm. 

The  regulation  of  money  is  one  of  the  attributes  of  sovereignty  ; 
but  this  is  sufficiently  provided  for  in  the  Federal  Constitution, 
wherein  it  is  declared  that  Congress  shall  have  power  to  coin 
money,  regulate  the  weight  and  value  thereof,  and  adequately 
punish  counterfeiters.  This  is  all  the  regulation  metallic  money 
requires,  and  we  should  have  none  other. 

The  State  governments  have  the  power  to  establish  banks  of 
deposit,  discount,  and  exchange ;  but  they  have  no  constitutional 
authority  to  establish  banks  of  issue,  inasmuch  as  the  Constitu 
tion  of  the  United  States  expressly  forbids  them  to  issue  "  bills  of 
credit,"  and  what  they  have  not  power  to  do  themselves  they  have 
not  power  to  delegate  to  others. 

The  business  of  banking,  properly  so  called,  that  is,  the  busi 
ness  of  receiving  deposits,  making  discounts,  and  dealing  in 
exchanges,  should  be  thrown  open  to  all,  individuals  and  copart 
nerships,  and  on  precisely  the  same  principle  that  the  business  of 
brewing  is  thrown  open  to  all.  No  more  privileges  should  be 


THE  FISCAL  HISTORY  OF  TEXAS.  91 

bestowed  or  restrictions  imposed  on  bankers  than  are  bestowed  or 
imposed  on  bakers,  brewers,  or  butchers.  But  no  individual, 
copartnership,  corporation,  or  government  should  be  suffe'red  to 
issue  paper  money. 

From  corporate  banking,  we  have  suffered  more  in  the  United 
States  than  from  all  other  causes  of  evil  put  together,  and  yet 
there  is  one  evil  that  is  worse  than  even  corporate  paper-money 
banking. 

It  is  government  banking  as  proposed  by  General  Lamar. 

Where  corporate  banking  prevails,  there  is  a  power  above  it — the 
government — by  which,  occasionally,  at  least,  its  excesses  may  be 
checked.  But  substitute  for  this  government  paper-money  bank 
ing,  and  we  have  the  evil  without  any  checks. 

The  money  power  and  political  power  will  then  be  in  the  same 
hands.  The  demagogues  who  now  control  the  elections  will  then 
control  the  money  market  also ;  and  woe  to  the  people  who  are 
subject  to  this  double  despotism. 

Excesses  in  issue  it  would  be  impossible  to  avoid,  because  those 
who  have  the  management  of  public  affairs  would  no  longer  have 
those  checks  on  expenditure  which  the  necessity  of  raising  revenue 
by  taxation  or  by  negotiating  loans,  now  imposes.  Before  the 
people  could  well  understand  the  operation  of  the  system,  they 
would  find  the  nation  deeply  involved  in  debt  which  they  would 
have  to  pay  by  new  taxation.  They  would,  moreover,  be  exposed 
to  all  the  evils  of  an  uncertain  currency  ;  less  fluctuating,  perhaps, 
than  corporate  bank  currency,  but  its  constant  tendency  would 
be  to  depreciation,  and  the  honest  fulfilment  of  contracts  would  be 
almost  impossible. 

The  present  modes  of  bribery  and  corruption  might  then  be  all 
safely  dispensed  with,  because  all  that  would  then  be  necessary 
would  be  to  give  a  man  a  douceur  in  the  form  of  a  loan  from  the 
government  bank,  with  an  understanding  that  it  was  not  to  be 
repaid  till  convenient. 

Let  the  Whigs  suppose  such  a  bank  under  the  management  of 
the  Democrats,  and  let  the  Democrats  suppose  it  to  be  under  the 
control  of  the  Whigs,  and  each  party  will  come  to  a  just  conclu 
sion  of  the  evils  it  would  produce. 

Some  people  delight  to  speak  of  the  constitutional  treasury 
system  as  a  government  bank.  If  it  be  so,  then  everybody  who 


92  THE  FISCAL  HISTORY  OF  TEXAS. 

keeps  his  own  money  has  a  bank  in  his  own  pocket.  This  is  an 
application  which  may  be  made  of  the  word,  but  it  is  an  unusual 
one ;  and  when  it  is  used  by  opponents  of  the  constitutional  sys 
tem  seems  intended  to  confound,  in  the  minds  of  their  hearers, 
things  that  are  different.  So  long  as  the  government  confines 
itself  to  keeping  its  own  money,  and  issues  no  drafts  except  such 
as  are,  dollar  for  dollar,  representatives  of  gold  or  silver  actually 
in  deposit,  its  bank  (if  any  will  still  call  it  by  that  name)  will  do 
much  good  and  no  harm.  But  let  it  to  these  functions  add  issues 
of  notes  resting  on  the  same  basis  that  bank  issues  now  rest,  and 
to  these  let  it  add  the  receipt  of  private  deposits,  discount  of 
notes,  and  dealings  in  private  exchanges,  and  it  will  be  just  such 
a  bank  as  President  Lamar  wished  to  establish,  all  the  evils  of 
which  no  pen  can  portray. 

A  bill  to  incorporate  the  Bank  of  the  Republic  of  Texas, 
reported  in  conformity  with  the  views  of  the  President,  was  read 
a  second  time,  January  21,  1839,  and  then  laid  on  the  table  by  a 
vote  of  sixteen  to  fourteen. 

A  committee,  to  whom  the  subject  had  been  referred,  reported 
that  a  repeal  of  the  duties  on  imports  would  be  utterly  destructive 
of  revenue  and  of  credit. 

A  committee,  to  whom  a  bill  had  been  referred  "for  a  stay  of 
execution  for  a  twelvemonth  unless  promissory  notes  were  taken 
in  payment,"  reported  that  such  a  measure  would  be  destructive 
of  credit  and  confidence,  and  a  violation  of  the  obligation  of  con 
tracts. 

In  justice  to  the  Texans,  it  must  be  said,  that  they  never  made 
their  government  paper  a  legal  tender  in  the  payment?  of  private 
debts.  Neither  did  they  (fond  as  a  portion  of  them  unfortunately 
were  of  Lynch  law),  ever  do  violence  to  a  man  because  he  was 
unwilling  to  receive  their  paper  for  more  than  its  market  value. 
Hence  their  government  paper-money  did,  in  many  respects,  much 
less  evil  than  did  "the  continental  money"  of  our  revolutionary 
Congress. 

December  21,  1838,  an  act  was  passed  exempting  from  direct 
taxation^, for  one  year  the  inhabitants  of  certain  counties  infested 
by  the  Mexicans  and  Indians. 

It  was  ordered,  by  an  act  of  the  same  day,  that  a  regiment  of 
eight  hundred  and  forty  men  be  raised  for  the  protection  of  the 


THE  FISCAL  HISTORY  OF  TEXAS.  93 

northern  and  western  frontier,  and  that  three  hundred  thousand 
dollars  in  treasury  notes  be  appropriated  to  pay  the  expenses  of 
the  same.  Provision  was  made,  December  29,  for  adding  to 
these  eight  companies  of  mounted  volunteers,  in  all,  four  hundred 
and  seventy-two  men ;  and  January  1  and  10,  1839,  two  com 
panies  of  rangers,  one  hundred  and  twelve  men;  and  again,  Janu 
ary  23,  three  companies  of  mounted  volunteers,  one  hundred  and 
seventy-seven  men.  On  the  24th  of  January  an  act  was  passed 
appropriating  one  million  dollars  for  the  protection  of  the  fron 
tier  and  for  military  purposes  in  general.  January  26,  two  more 
companies  of  rangers  (one  hundred  and  twelve  men)  were  ordered 
to  be  raised. 

The  troubles  which  caused  the  raising  of  most  of  these  forces  do 
not  appear  to  have  been  of  long  duration,  as,  January  26,  an  act 
was  passed  "to  appoint  commissioners  to  take  charge  of  the  pro 
perty  of  those  engaged  in  the  late  rebellion  in  the  County  of 
Nacogdoches." 

On  the  4th  of  January  an  act  was  passed  allowing  to  each  head 
of  a  family  six  hundred  and  forty  acres,  and  to  each  single  man 
three  hundred  and  twenty  acres,  who  had  arrived  in  the  Republic 
since  the  1st  of  October,  1837,  or  who  might  arrive  by  the  1st 
of  January,  1840,  with  the  intention  of  settling  therein.  To  each 
permanent  resident  citizen  who  had,  or  who  might  arrive  at  the 
age  of  seventeen  years,  was  also  made  a  conditional  grant  of  three 
hundred  and  twenty  acres  of  land.  Appropriations  of  land  were 
also  made  for  the  benefit  of  those  officers  and  soldiers  whose  families 
were  then  in  the  country  or  might  arrive  by  the  1st  of  January, 
1840. 

January  10,  an  act  was  passed  sanctioning  the  contract,  made 
by  certain  agents  of  the  Republic  with  Gen.  James  Hamilton,  of 
South  Carolina,  for  the  purchase  of  the  steam-vessel  "  Charleston," 
(afterwards  the  "Zavalla,")  for  the  price  of  $120,000. 

January  26,  an  act  was  passed,  the  preamble  to  which  declared 
that,  whereas  the  agent  of  the  Republic  had  made  a  contract  for 
the  purchase  of  one  ship,  of  eighteen^guns  ;  two  brigs,  of  twelve 
guns  each  ;  and  three  schooners,  of  six  guns  each  ;  and, 

"Whereas,  It  has  become  indispensably  necessary,  in  order  to  repair 
and  keep  in  service  the  said  vessels,  as  well  for  the  protection  of  the 
coasts  and  harbors  of  Texas,  as  for  the  protection  of  the  commerce  thereof, 


94  THE  FISCAL  HISTORY  OF  TEXAS. 

that  an  appropriation  be  made  :  Be  it  enacted,  That  the  sum  of  $250,000 
in  treasury  notes,  in  the  promissory  notes  of  the  government,  be  appro 
priated  for  the  naval  service  of  the  year  1839." 

Most  fortunate  were  the  Texans  in  making  these  purchases,  for, 
as  we  have  seen,  their  little  navy  had  been  totally  destroyed.  It 
would  be  anticipating  the  course  of  our  narrative  if  we  should  say 
that  neither  the  "  Zavalla,"  nor  any  of  the  other  vessels  have,  to  this 
day,  been  paid  for. 

January  19,  an  act  was  passed  requiring  the  stock-books  to  be 
again  opened,  and  to  remain  open  till  the  first  of  January,  1840, 
for  the  purpose  of  funding  the  government  liabilities.  By  one 
section  of  this  act,  it  was  provided  that  no  promissory  note  here 
after  issued  or  paid  out  should  bear  interest ;  but  the  holders  of 
said  notes  should  be  allowed  to  fund  them  in  the  ten  per  cent, 
stock  of  the  government. 

January  22,  an  act,  supplementary  to  the  five  million  loan  act, 
was  passed,  strengthening  the  pledges  of  faith  and  revenue,  and 
declaring  that,  as  soon  as  the  government  should  deem  it  expedient 
to  sell  the  public  lands,  $300,000  a  year  of  the  proceeds  thereof 
should  be  set  aside  as  a  sinking  fund,  for  the  ultimate  redemption 
of  the  five  million  loan. 

On  the  same  day,  an  act  was  passed  authorizing  the  President 
to  issue  bonds  to  an  amount  not  exceeding  one  million,  at  eight  per 
cent,  per  annum.  Except  in  relation  to  the  rate  of  interest,  the 
terms  and  conditions  were  similar  to  those  of  the  five  million  act 
without  the  supplement. 

January  23,  all  officers  of  government,  district  judges  and  the 
chief  justice  excepted,  were  prohibited  from  demanding  for  the 
dues  or  appurtenances  of  their  office,  or  appointment  other  than 
the  promissory  notes  of  the  Republic. 


THE  FISCAL  HISTORY  OF  TEXAS.  95 


CHAPTER    XIV. 

FROM    THE    CLOSE    OF   THE   THIRD    TO    THE    CLOSE    OF   THE    FOURTH 
CONGRESS:    FEBRUARY,  1839,  TO  OCTOBER,  1840. 

Loan  from  the  Commercial  and  Railroad  Bank  of  Vicksburg  frustrated — Encouraging 
prospects  of  a  loan  in  Europe — Hopes  of  a  large  revenue  from  customs,  and  other 
taxes — Joy  on  hearing  of  a  loan  from  the  United  States  Bank — Removal  of  seat 
of  government  to  Austin — Extracts  from  President  Lamar's  message  to  fourth  Con 
gress — Deficiency  of  revenue — New  revenue  act — Act  to  provide  for  more  certain 
operation  of  the  sinking  fund — For  issue  of  treasury  bonds — For  funding  the 
floating  debt  in  eight  and  ten  per  cent,  stocks — Low  price  of  treasury  notes,  and 
gloomy  condition  of  affairs. 

4 

IT  may  have  struck  the  reader  as  strange  that  the  Texan  Go 
vernment,  with  all  its  loan  acts,  and  all  its  different  commissioners 
in  Europe  and  America,  and  all  its  pledges  of  faith,  and  land,  and 
revenues,  and  everything  else  it  possessed,  should  have  been  able 
to  borrow,  in  a  direct  way,  not  even  one  hundred  thousand  dollars. 
Prudent  capitalists  would,  indeed,  be  very  cautious  about  lending 
to  a  revolutionary  government.  But  there  were  many  banks  in 
the  United  States  in  that  day  living  by  expedients,  and  it  might 
be  supposed  that  they  could  not  but  be  benefited  by  issuing  their 
notes  in  exchange  for  Texan  securities. 

Something  like  this  was  attempted  in  the  spring  of  1839,  and 
the  only  wonder  with  us  is,  that  it  was  not  attempted  before.  The 
tale  is  thus  told  in  the  Houston  Morning  Star  of  April  10,  1839 : — 

"  It  appears  that  arrangements  had  been  made  with  one  of  the  agents  of 
the  Commercial  and  Railroad  Bank,  at  Vicksburg,  Mississippi,  to  negotiate 
a  loan  for  eight  hundred  thousand  dollars,  for  which  he  was  to  receive  the 
moderate  compensation  of  fifty  thousand  dollars  !  The  president  of  the  bank, 
without  consulting  the  directors,  and  even  without  the  knowledge  of  the 
cashier,  agreed  to  make  the  loan,  which,  with  a  deduction  of  three  hundred 
thousand  dollars  of  the  funded  debt  of  Texas,  owned  by  the  above-mentioned 
agent,  was  to  be  paid  over  to  our  commissioner.  To  cap  the  climax,  in  a 
day  or  two  the  bank  suspended  specie  payment.  Fortunately  for  us,  Mr. 
Bobbins,  the  cashier,  put  his  veto  upon  the  loan,  and  thus  relieved  our 
country  from  being  deluged  with  a  quantity  of  shin-plasters,  not  worth,  in 
reality,  half  as  much  as  our  own  currency." 


96  THE  FISCAL  HISTORY  OF  TEXAS. 

But,  if  no  loan  could  be  obtained  in  Mississippi,  it  did  not  thence 
follow  that  none  could  be  negotiated  in  London.  And,  on  the  9th, 
the  editor  of  the  Morning  Star  announced  that  he  had  been  favored 
with  the  perusal  of  a  letter  from  a  gentleman  of  high  standing, 
who  had  recently  visited  Europe,  in  which  was  the  following  pas 
sage  :— 

"  The  loan  of  five  millions  can  be  easily  obtained  in  London.  I  learn 
that  Gen.  Hamilton  is  appointed  commissioner  with  Mr.  Burnley,  to  nego 
tiate  the  same,  at  which  I  really  rejoice.  Gen.  Hamilton  is  well  known 
and  much  respected  in  London.  The  house  of  Horseley,  Palmer,  &  Co., 
stands  ready  to  take  the  loan." 

Ten  days  afterwards,  the  editor  gave  a  long  article,  in  which  he 
expressed  doubts  if  any  great  advantage  would,  after  all,  result  from 
the  success  of  the  commissioners  : — 

"  If  Texas  had  no  liabilities  to  meet,  and  no  notes  to  redeem,  the  judi 
cious  application  of  five  millions  of  dollars  to  the  promotion  of  internal 
improvements,  might  give  an  impetus  to  the  zeal  and  energy  of  the  inhabi 
tants.  *  *  But  the  notes  have  been  bought  up,  and  by 
persons  of  the  United  States.  This  being  the  case,  the  money,  instead  of 
remaining  in  the  country,  will  find  its  way  back  again/' 

The  editor  then  complains  of  extravagance  in  public  expendi 
tures  : — 

"We  have  an  army  of  trifling  extent,  and  have  nearly  as  many  staff 
officers  as  they  have  in  the  United  States.  *  *  It  is  stretching 
the  truth  but  very  little  to  say  that  we  have  an  army  and  naval  officer  for 
almost  every  soldier  and  seaman  in  the  service/' 

Soon  after  this,  the  Morning  Star  had  a  controversy  with  the 
Houston  Intelligencer  about  the  public  revenue  for  the  year.  The 
Morning  Star  supposed  the  total  would  be  $1,079,000  ;  but  the 
Intelligencer  put  down  the  customs  at  $954,000,  the  direct  taxes 
at  $564,000,  the  receipts  for  the  sale  of  city  lots  at  $1,000,000, 
and  swelled  the  whole  revenue  to  $3,018,000.  The  Civilian 
reduced  the  amount  to  $2,200,000. 

A  correspondent  of  the  Star,  in  an  article  that  appeared  on  the 
8th  of  May,  advised  the  people,  in  every  section  of  the  Republic, 
to  hold  meetings  and  pass  resolutions  to  receive  nothing  but  gold 
and  silver,  and  treasury  notes.  This  would  drive  the  notes  of  the 
banks  of  the  States  out  of  circulation,  and  treasury  notes,  which 
would  take  their  place,  would  thereby  be  raised  in  value.  "  The 
faith  of  the  Republic  is  pledged  for  their  redemption,  and  time 


THE  FISCAL  HISTORY*  OF  TEXAS.  97 

alone  is  requisite  to  allow  the  government  to  give  dollar  for  dollar 
in  specie  for  its  notes.  They  could  be  cancelled  in  two  years  by 
a  direct  tax,  but  such  a  course  is  contrary  to  sound  policy." 

Here  is  more  proof  that  running  into  debt,  and  keeping  in  debt, 
was  matter  of  principle  with  the  Texans. 

On  the  24th  of  June,  the  Star  said  : — 

"  Our  promissory  notes  are  now  so  much  depreciated  that  they  are  almost- 
worthless.  Everything  in  the  country  is  immensely  high,  and  still  the 
government  goes  on  recklessly  throwing  out  its  pictured  bits  of  paper,  re 
gardless  of  the  fact  that  every  one  they  put  out  depreciates  the  value  of  the 
rest.  Were  the  expenditures  necessary  and  beneficial,  so  much  objection 
could  not  be  made ;  but  such  is  by  no  means  the  case/' 

It  was  not  long  before  the  editor  of  the  Star  began  to  think 
that  a  loan  would  not  be  so  bad  a  thing  after  all ;  at  least  this  is 
our  inference  from  the  leading  article  in  his  paper  of  July  11 : — 

" GOLDEN  NEWS  !  ! ! 

"  A  letter  was  received  in  this  city  yesterday  afternoon,  brought  by  the 
'  Emblem/  from  Col.  Barnard  E.  Bee,  dated  New  Orleans,  July  4,  convey 
ing  to  us  the  gratifying  intelligence  that  General  Hamilton  had,  before 
leaving  the  United  States  for  Europe,  negotiated  a  loan  for  $500,000,  under 
the  law  authorizing  one  million  to  be  raised,  and  that  Lynch  Hamilton,  a 
son  of  our  commissioner,  would  be  on,  in  the  next  boat  from  New  Orleans, 
with  the  money" 

This  joy  did  not  seem  soon  to  expire,  for,  on  the  23d,  the  editor 
exclaims — 

"Everybody  is  on  the  tiptoe  of  expectation  for  the  report  of  the  cannon 
which  shall  announce  the  arrival  of  the  steamboat  from  Columbia,  because 
$500,000  are  expected.  We  assure  the  gentleman  who  may  be  so  fortunate 
as  to  be  the  bearer  of  the  money,  that  he  will  be  welcome  as  the  flowers  of 
May." 

But  the  money  never  came  to  Houston,  and  the  cannon  were 
not  fired.  It  was  deposited  in  a  bank  in  New  Orleans,  and  con 
sisted  of  United  States  Bank  post-notes,  to  turn  which  into  ready 
means  the  government  had  to  pay  seven  and  a  half  per  cent, 
discount.  The  whole  amount,  moreover,  was  overrated. 

The  government  now  removed  to  the  new  city  of  Austin,  at  the 
foot  of  the  Cordilleras,  and  on  the  very  borders  of  the  Indian 
hunting-grounds.  The  removal,  at  this  moment,  was  an  act  of 
folly,  as  it  increased  the  expenditures  of  both  the  governors  and 
the  governed  ;  but  it  afforded  an  opportunity  of  speculating  on  the 
sale  of  lots  in  the  new  metropolis,  and  it  invited  speculations  to 
7 


98  THE  FISCAL  HISTORY  OF  TEXAS. 

lands  in  the  interior ;  and  these  two  motives  combined  were  too 
strong  to  be  resisted.  Some  months  afterwards,  the  Indians 
stealthily  entered  the  town,  killed  two  men,  and  stole  a  number  of 
horses.  Such  was  the  spot  selected  for  the  assembly  of  the  legis 
lative  and  executive  wisdom  of  all  Texas. 

Here  the  fourth  Congress  convened  on  Monday,  November  11, 
1839;  and,  on  the  12th,  President  Lamar  sent  them  a  very  long 
message. 

The  passages  which  follow  embrace  the  points  of  most  interest 
to  the  reader  : — 

"  Our  foreign  relations  are  daily  assuming  a  more  pleasing  aspect,  and 
afford  us  at  the  present  moment  the  strongest  assurance  that  our  national 
character  will  ere  long  be  recognized  by  the  most  important  governments  of 
the  earth." 

"  I  regard  the  prospect  of  obtaining  a  loan  of  five  millions  of  dollars, 
authorized  by  an  act  of  the  last  session,  as  cheering  and  satisfactory.  The 
commissioners  appointed  to  negotiate  that  loan,  after  obtaining  an  advance 
of  $280,000  upon  the  eventual  success,  proceeded  to  Europe,  with  a  view  to 
its  final  consummation;  and  I  am  assured  by  communications  from  one  of 
them,  that  nothing  but  the  peculiarly  embarrassed  condition  of  the  money 
market  in  England,  growing  out  of  some  recent  and  heavy  exportations  of 
bullion  to  the  Continent,  has  prevented  a  sale  of  our  bonds  before  this 
time;  and  upon  terms  which,  it  is  believed,  will  secure  to  us  in  cash  the 
nominal  amount,  at  least,  for  which  they  were  issued.  These  embarrass 
ments,  however,  were  considered  temporary  in  their  nature,  and  are  said  to 
be  already  yielding  to  a  more  healthful  and  settled  state  in  the  monetary 
affairs  of  the  country;  and  we  may  now  look,  with  confidence,  to  an  early 
realization  of  the  hopes  which  have  been  so  long  entertained  in  reference  to 
this  subject,  and  upon  the  fulfilment  of  which  so  much  of  our  national  pros 
perity  depends.  The  $280,000  obtained  by  the  commissioners  have  been 
almost  exclusively  devoted  to  the  purchasing  of  public  arms  and  ammuni 
tion,  the  enlistment  of  a  regular  force,  and  to  the  equipment  of  the  navy 
for  efficient  operations." 

This  was  part  of  a  loan  of  some  $400,000  obtained  from  the 
Pennsylvania  Bank  of  the  United  States. 

The  new  Secretary  of  the  Treasury,  Mr.  James  H.  Starr,  made 
his  report  on  the  3d  of  November. 

The  reader  will  recollect  that  the  late  Secretary  had  offered  an 
estimate,  according  to  which  there  was  to  be  a  small  balance  in 
the  treasury  on  the  30th  September,  1839.  Alas  for  human 
hopes ! — the  amount  of  outstanding  liabilities  was  greatly  in 
creased. 

Mr.  Smith  supposed  that  the  income  of  the  year  from  customs, 
direct  taxes,  and  other  branches  of  revenue  would  be  upwards 


THE  FISCAL  HISTORY  OF  TEXAS.  99 

of  a  million;  the  editor  of  the  Civilian,  that  they  would  be 
$2,200,000 ;  and  the  editor  of  the  Intelligencer,  that  they  would 
be  upwards  of  $3,000  000. 

The  total  amount  actually  received  into  the  treasury  was 
$302,166  90,  and  all  that  in  the  government's  own  inconvertible 
paper ! 

While  the  receipts  fell  short  of,  the  expenditures  greatly  ex 
ceeded  Mr.  Smith's  estimate.  He  had  forgotten  to  allow  any 
thing  for  military  and  naval  expenses,  and  sundry  other  things 
too  numerous  to  mention.  The  expenditures  amounted  to  $1,606,- 
654  33,  without  counting  new  treasury  notes  issued  in  exchange 
for  old  ones. 

The  public  debt,  which  was,  September  30, 1838,  $1,887,526  32, 
was  now  swelled  to  $3,102,083  35,  without  counting  the  million  of 
liabilities  incurred  for  the  purchase  of  vessels  of  war. 

President  Lamar,  his  Cabinet,  and  the  Congress  were  not  the 
men  to  be  frightened  by  such  an  exposition  as  this.  They  were  too 
brave  for  that ;  and  so  they  immediately  set  about  passing  new 
revenue  laws,  one  of  which  filled  nineteen,  and  another,  with  its 
supplements,  twenty-one  pages. 

There  is  no  use,  however,  in  raising  money,  unless  it  be  spent, 
and  the  Texan  Congress  provided  for  this  by  several  acts,  one  of 
which,  passed  February  3d,  and  entitled  an  "  Act  making  Appro 
priations  for  the  Support  of  the  Government  for  the  year  1840," 
filled  more  than  six  closely  printed  pages.  Either  from  prudential 
or  other  considerations,  the  Congress  did  not  state  on  the  face  of 
the  bill  the  whole  amount  appropriated. 

"  It  is  estimated/'  said  the  Secretary,  "  that  the  receipts  at  the  treasury 
during  the  ensuing  year,  under  the  proposed  system  for  collecting  the  re 
venue,  will  be  as  follows,  viz. : — 

From  customs,         .  .  .  .          $400,000 

Taxes  and  land-dues,  .  .  .  500,000 

Sales  of  lots  in  the  cities  of  Austin  and  Calhoun,     400,000 

$1,300,000 

Referring  to  this  estimate,  in  a  communication  dated  November 
14,  he  remarked: — 

"  Under  the  present  system  of  the  laws,  however,  owing  to  their  great, 
defects  in  prescribing  the  manner  of  assessing  and  collecting  the  direct  tax, 
and  the  inability  of  this  department  to  compel  the  receivers  of  public 
moneys  to  pay  them  into  the  treasury,  it  is  believed  that  not  one-fourth  of 
that  sum  would  be  realized  to  the  government." 


100  THE  FISCAL  HISTORY  OF  TEXAS. 

But  the  fourth  Congress  did  not  content  itself  simply  with  new 
modes  of  raising  revenue,  and  new  modes  of  spending ;  it  also 
devised  new  modes  of  borrowing.  As  some  of  our  readers  may 
have  still  in  possession  some  of  the  new-fashioned  securities  that 
were  uttered  under  its  auspices,  we  must  be  more  particular  in 
describing  the  laws  which  authorized  them,  than  we  have  been  in 
relation  to  others  passed  this  session. 

January  14,  an  act  was  passed  u  to  provide  for  the  more  cer- 
-tain  operation  of  the  sinking  fund  to  extinguish  the  five  millions 
loan."  It  filled  sixteen  sections.  Omitting  details  which  need 
not  be  introduced  here,  its  chief  provisions  were  : — 

"  1st.  In  case  it  shall  be  deemed  inexpedient  to  bring  the  public  lands 
into  the  market  on  or  before  January  1,  1842,  or  that,  when  so  brought 
forward,  it  should  be  deemed  inexpedient  to  sell  them,  it  is  hereby  de 
clared  to  be  then  and  after  that  period  the  duty  of  the  Secretary  of  the 
Treasury  to  provide  from  other  sources  the  said  three  hundred  thousand 
dollars  a  year." 

From  what  source  the  Secretary  was  to  get  the  three  hundred 
thousand  dollars  a  year,  the  bill  did  not  mention. 
The  next  important  provision  was  :— 

"  Should  the  market  price  of  said  bonds  [in  London,  Paris,  Amsterdam, 
or  wherever  the  said  loan  should  be  negotiated]  reach  fifty  per  cent,  pre 
mium  beyond  the  par  value  of  the  same,  the  holders  of  said  bonds  shall  be 
required,  on  the  application  of  said  agents,  to  surrender  and  cancel  the  same 
on  the  payment  of  said  par  value  and  said  premium." 

This  was  prudent  foresight.  Texan  securities  might  rise  in 
foreign  markets  to  $180,  or  perhaps  to  $200,  for  $100  paid.  To 
provide  for  such  a  contingency,  the  Congress  reserved  to  itself  the 
privilege  of  buying  them  in,  as  soon  as  they  should  reach  $150. 

The  15th  section  we  will  give  in  full : — 

"  Be  it  further  enacted,  That  for  the  redemption  of  all  loans  negotiated  by 
the  authority  of  the  Republic  of  Texas,  independently  of  the  reservation  of 
the  sinking  fund,  the  proceeds  of  the  public  lands  generally,  its  revenues 
and  public  faith,  are  solemnly  pledged." 

Thus,  in  addition  to  the  particular  pledges  for  each  loan,  Texas 
gave  another  for  all  together. 

February  5,  an  act  was  passed  "  for  creating  funds  for  the  sup 
port  of  government  for  the  year  1840." 

Section  1  provided  that  blank  forms  of  bonds  for  100,  500,  and  1000 
dollars,  should  be  prepared,  bearing  an  interest  of  eight  per  cent,  per 
annum,  payable  half  yearly  in  gold  and  silver. 


THE  FISCAL  HISTORY  OF  TEXAS.  101 

Section  2  provided  for  the  issue  of  these  bonds  to  the  amount  of 
$1,500,000. 

Section  3  declared  that  these  bonds  should  be  received  in  payment  of 
customs  and  direct  taxes. 

Section  4  set  apart  the  revenue  from  the  license  tax,  and  the  tax  on 
personal  property,  as  a  fund  for  the  payment  of  interest  on  these  bonds. 

Section  5  provided  that  the  bonds  should  have  coupons  attached  to 
them. 

These  are  what  are  known  as  Texas  treasury  bonds,  and  they 
differed  from  the  treasury  notes  of  the  first  and  second  issues, 
only  in  being  of  larger  denominations.  The  second  section  pro 
vided  for  their  "  issue  as  circumstances  may  require  in  payment 
of  appropriations,  for  the  support  of  government  for  the  year 
1840." 

These  bonds  soon  sunk  to  twenty  cents  in  the  dollar. 

February  1.  An  act  was  passed  to  authorize  the  commissioners  of  the 
five  million  loan  u  to  pledge  a  portion  of  the  bonds,  in  order  to  enable  them 
to  raise  money  by  an  advance  on  the  bonds,  which  may  be  made  on  the 
credit  of  eventual  success  in  negotiating  the  loan." 

On  the  same  day  that  it  passed  the  act  for  the  issue  of  treasury 
bonds,  February  5,  the  Congress  passed  another  "  to  provide 
for  the  redemption  of  the  promissory  notes  of  the  government  now 
in  circulation,  and  for  funding  other  liabilities  of  the  govern 
ment." 

Section  1  required  the  Secretary  of  the  Treasury  to  procure  certificates 
in  blank,  for  sums  of  one  hundred,  five  hundred,  and  one  thousand  dollars, 
to  be  transferable  by  simple  indorsement. 

Section  2  provided  that  these  certificates  should  be  issued  to  the 
holders  of  such  of  the  promissory  notes  of  the  government  as  should  pre 
sent  them  to  the  stock  commissioner  before  the  first  of  July  ensuing;  and, 
that  the  said  certificates  should  bear  an  annual  interest  of  ten  per  cent., 
payable  semi-annually  in  gold  and  silver. 

Section  3  provided  that  the  said  certificates  should  be  issued  in  ex 
change  for  all  other  liabilities  of  the  government  which. may  have  been 
properly  and  regularly  audited. 

Section  4  provided  that  for  such  promissory  notes  as  should  not  be 
presented  for  funding  till  after  July  1,  certificates  should  be  issued  bearing 
only  eight  per  cent,  interest. 

Thus,  the  government  provided  for  its  fiscal  emergencies :  first, 
by  making  provision  for  funding,  at  eight  and  ten  per  cent,  inte 
rest,  all  such  of  its  outstanding  liabilities  as  bore  no  interest ; 
and  secondly,  by  authorizing  the  issue  of  a  new  batch  of  treasury 


102  THE  FISCAL  HISTORY  OF  TEXAS. 

notes,  of  large  denominations,  to  be  called  treasury  bonds,  and  to 
bear  eight  per  cent,  interest. 

The  fourth  Congress  adjourned  on  the  5th  of  February,  and 
did  not  hold  a  second  session. 

Lamar's  administration  did  not  give  general  satisfaction. 
"Apart  from  politics,  and  as  a  private  citizen,"  said  the  Austin 
City  Gazette,  March  18,  1840,  "we  shall  ever  respect  him  for  his 
literary  acquirements,  his  amiable  disposition,  and  unassuming 
manners  ;  but,  as  President  of  the  Republic,  we  must,  in  common 
with  a  large  portion  of  our  fellow-citizens,  condemn  many,  very 
many  of  his  acts  ;  not  that  we  blame  the  heart  so  much  as  the 
easy  disposition  of  the  man.  It  is  there  that  the  mischief  lies  : 
he  allows  others  to  think — to  act  for  him." 

The  following  view  of  the  state  of  public  affairs,  we  extract 
from  a  communication  published  in  the  Austin  City  Crazette, 
October  21,  1840  :— 

"  Texas  promissory  notes  are  worth  about  fifteen  cents  upon  the  dollar — 
there  is  little  prospect  of  a  loan — the  taxes  are  not  promptly  paid;  and  if 
they  were,  would  only  return  to  the  treasury,  at  par,  that  which  was  issued 
for  less  than  one-sixth  of  the  amount.  The  continual  issue  of  this  sort  of 
currency  can  have  but  one  tendency  now,  and  that  is,  to  depreciate  it  still 
further.  In  this  exigency,  what  are  we  to  do  ?  All  the  officers  of  govern 
ment,  from  high  to  low,  have  been  required  to  receive  its  issues  at  par,  in 
payment  of  their  salaries.  This  has  not  raised  it :  but  it  has  impoverished 
them;  and  now  an  ordinary  day-laborer  receives  more  of  it  per  diem  than 
any  civil  officer  under  the  establishment. 

"We  are  at  the  lowest  round  of  the  ladder.  Congress  will  soon  convene, 
and  the  pay  of  its  members  will  not  purchase  their  food.  The  members 
cannot  long  live  upon  patriotism ;  and  many  of  them  have  nothing  else  but 
that  and  their  pay  to  live  upon." 


THE  FISCAL  HISTORY  OF  TEXAS.  103 


CHAPTER    XV. 

PROCEEDINGS  UNDER  THE  FIFTH  CONGRESS:  NOVEMBER,  1840,  TO 
NOVEMBER,  1841. 

Various  devices  for  borrowing — Remarks  of  the  new  Speaker  of  the  House  of  Repre 
sentatives — Smallness  of  the  revenues — Great  increase  of  the  public  debt — Pro 
ject  of  invading  Mexico — Repeal  of  act  for  funding  treasury  notes — Retrenchment 
of  public  expenses — Annunciation  that  a  loan  had  been  negotiated  in  Europe — 
Effect  of  this  news  on  the  public  mind,  and  on  the  price  of  Texan  securities — Mr. 
Horseley  Palmer,  ex-Governor  of  the  Bank  of  England,  plans  a  national  bank  for 
Texas,  to  be  presided  over  by  Mr.  Jaudon,  ex-cashier  of  the  United  States  Bank — 
News  of  the  negotiation  of  the  loan  confirmed — Doubts  subsequently  arise — Mr. 
Bullock  and  his  pigs — Difficulties  with  M.  de  Saligny,  the  Minister  of  France  to 
Texas. 

BEFORE  we  proceed  further,  we  beg  to  solicit  the  reader's  admi 
ration  for  the  various  devices  to  which  the  Texan  Government 
had  recourse,  to  meet  the  various  tastes  and  fancies  of  those  with 
whom  it  had  dealings,  or  wished  to  have  dealings. 

Did  a  man  wish  to  lend  money  to  it?  He  had  the  choice  of  four 
loans :  namely,  the  one  hundred  thousand  dollar  loan  act,  and  the 
million  dollar  loan  act  of  the  Provisional  Government  (both  of 
which  remained  unrepealed) ;  and  the  million  and  the  five  million 
loan  acts  of  the  Republic. 

Was  the  Republic  indebted  to  him?  He  received  an  audited 
draft.  This  he  might  keep  if  he  chose,  or  pay  it  in  for  land-dues. 
Did  not  this  satisfy  him  ?  He  could  exchange  his  audited  draft  for 
treasury  notes,  which  were  receivable  for  all  public  dues.  Was 
not  this  satisfactory  ?  Then  he  could  receive  in  exchange  for  it 
treasury  bonds  bearing  eight  per  cent,  interest.  If  he  chose  to 
keep  them,  the  interest  would  be  constantly  accumulating ;  and  if 
he  should  have  immediate  use  for  them,  they  were  receivable  every 
where  in  public  payments.  Did  not  even  this  satisfy  him?  Then 
he  could  fund  his  draft  in  ten  per  cent,  stock,  the  interest  on  which 
was  payable  semiannually  "in  gold  and  silver/' 


104  THE  FISCAL  HISTORY  OF  TEXAS. 

This  was  the  state  of  affairs  when  the  fifth  Congress  assembled 
at  Austin,  on  the  2d  of  November,  1840. 

Mr.  Kauffman,  the  Speaker  of  the  House  of  Representatives, 
made,  in  his  opening  address,  the  following  remarks: — 

"  But  seven  members  of  the  last  House  have  been  deputed  by  the  people 
to  join  in  the  labors  of  this  !  The  destinies  of  Texas  have  been  committed 
to  other,  and,  I  earnestly  trust,  abler  hands.  What  has  produced  this  ex 
traordinary  revolution  ?  We  cannot  believe  that  our  predecessors  were  dis 
honest  or  incapable ;  but  we  know  that  they  failed  to  satisfy  the  expecta 
tions  of  an  anxious  and  confiding  people.  What  was  their  error  ?  The 
voice  of  the  nation  answers :  They  increased,  instead  of  diminishing,  the 
national  expenditures.  Let  us,  then,  gentlemen,  with  one  accord,  resolve 
to  avoid  the  rock  on  which  they  split." 

In  his  message,  President  Lamar  said:  "The  settlements  have 
been  extended  on  various  parts  of  the  frontiers."  But  he  did  not 
add  that  this  was  the  cause  of  new  difficulties  with  the  Indians. 

He  regretted  that  it  was  not  in  his  power  to  give  satisfactory 
information  as  to  the  operations  of  the  loan  commissioners. 
They  were  trying  the  markets  of  France,  England,  and  Holland, 
with  varying  prospects  of  success. 

He  thought  the  complaints  some  made  of  the  burden  of  taxation 
were  very  unreasonable ;  for,  though  the  duties  on  imports  were 
nominally  fifteen  per  cent.,  they  amounted  in  reality  to  no  more 
than  three  per  cent.,  inasmuch  as  they  were  paid  in  the  depreciated 
paper  of  the  government. 

The  acting  Secretary  of  the  Treasury,  Mr.  William  Sevey,  in 
his  report  of  October  15,  1840,  and  in  the  supplement  thereto, 
gave  no  distinct  account  of  the  revenue  for  the  year ;  but  stated 
that  the  total  revenue  collected,  from  the  organization  of  the 
government  up  to  September  30,  1840,  was  $903,052  01;  or,  in 
cluding  the  amount  in  the  hands  of,  and  supposed  to  be  in  the 
Lands  of,  collecting  and  receiving  officers,  $1,486,235  67. 

The  revenue  officers  of  Texas  took  delight,  from  the  very  begin 
ning,  in  deceiving  themselves  by  the  supposition  that  there  were 
large  amounts  of  revenue  on  the  way  to  the  treasury.  So  well  as 
we  can  ascertain,  from  a  collation  of  various  documents,  the  actual 
receipts  into  the  treasury  were,  during  the  year  ending  Septem 
ber  30,  1840,  as  follows — rejecting  repayments,  promissory  notes 
received  from  the  Secretary,  and  the  proceeds  of  the  loan  from 
the  United  States  Bank : — 


THE  FISCAL  HISTORY  OF  TEXAS.  105 

Customs,       .     %*£     .         .         ,:.      .      .,,..:,  $166,821  12 

Land-dues,  licenses,  and  direct  taxes,        .         .  123,224  66 

Austin  lots, ,.  158,97481 

Galveston  lots, 9,822  71 

Fines,  .         .         .      v  •;; '    .  .  25  00 

Donations,     .         .       ••;   ;•; '•?:•:      •         •         •  51  56 


$458,919  8G 

This  was  but  little  more  than  one-third  the  amount  Mr.  Secretary 
Starr  had  estimated,  and  this  was  received  in  government  paper, 
which,  at  twenty  cents  in  the  dollar,  would  be  equal  to  only  ninety- 
two  thousand  dollars  in  specie. 

The  chief  support  of  the  government  in  this  year  was  from  the 
proceeds  of  the  loan  from  the  United  States  Bank,  on  which  drafts 
were  drawn  to  the  amount  of  one  hundred  and  fifty- eight  thousand 
four  hundred  and  ninety-five  dollars  and  ninety-eight  cents.  During 
the  whole  of  President  Houston's  first  term,  twenty-five  thousand 
dollars  in  par  funds  were  all  he  could  command.  President  Lamar 
was  highly  favored  in  having  in  one  year  such  funds  to  the  amount 
of  nearly  one  hundred  and  sixty  thousand  dollars. 

The  audited  drafts  and  certificates  issued  during  this  period  are 
admitted  to  have  been  two  millions  two  hundred  and  fifty-eight 
thousand  one  hundred  and  four  dollars  and  sixty-two  cents,  or 
nearly  ten  times  as  much  as  the  gross  revenue. 

The  acting  Secretary  made  the  public  debt  four  millions  eight 
hundred  and  twenty-two  thousand  three  hundred  and  eighteen 
dollars  and  sixty-two  cents;  but  if  the  audited  drafts  and  treasury 
notes  which  he  supposed  were  in  the  hands  of  collecting  officers  be 
added,  it  was  five  millions  four  hundred  and  eighty-five  thousand 
five  hundred  and  two  dollars  and  twenty-eight  cents,  without 
counting  the  liabilities  incurred  for  the  purchase  of  and  fitting  out 
of  the  navy.  The  increase  of  debt  in  one  year  exceeded  two  mil 
lion  three  hundred  thousand  dollars. 

"While  things  were  in  this  position,  the  Mexicans  threatened 
another  invasion  of  the  country.  But  the  Texans  were  not  dis 
heartened.  Mr.  Burnet,  who  was  now,  owing  to  the  indisposition 
of  General  Larnar,  the  acting  President,  said,  in  a  message  of 
December  16 — 

"  Our  overtures  have  been  rejected.  *  *  *  Let  us  not  forget  that  a 
resort  to  the  sword  cancels  all  previous  pledges,  and  opens  the  wa}'  to  u 


106  THE  FISCAL  HISTORY  OF  TEXAS. 

new  adjustment.  Texas  proper  is  bounded  by  the  Rio  Grande.  Texas,  as 
defined  by  the  sword,  may  comprehend  the  Sierra  del  Madre.  Let  the 
sword  do  its  proper  work." 

A  joint  committee  responded  cordially  to  these  sentiments  on 
the  18th  of  December ;  and  still  more  plainly  on  the  12th  of  Janu 
ary,  1841. 

"Your  committee  are  fully  aware  that  it  is  a  fact  well  known  and  long 
established  that  money  is  the  sinews  of  war;  without  that,  no  force  can 
long  be  kept  together  in  the  field.  That  we  have  neither  money  at  home 
nor  credit  to  any  extent  abroad  is  an  undeniable  fact,  how  humiliating 
soever  may  be  the  acknowledgment.  How,  then,  are  we  to  sustain  an 
army  in  the  field?  Where  are  the  means  to  come  from?  For  defensive 
measures,  your  committee  know  not — for  offensive  measures,  they  answer, 
from  the  coffers  of  the  enemy,  wrested  from  him  with  a  strong  hand. 

"  Your  committee  are  of  opinion  that  it  would  be  much  easier  to  sustain 
an  army  beyond  the  Rio  Grande  than  within  our  own  territory ;  that 
there  the  war  would  be  made  to  support  the  war;  and  the  captures  and 
contributions,  the  proceeds  of  which,  in  accordance  with  the  law  of  nations 
and  the  usages  of  war,  would  come  into  the  military  chest,  would,  if  well, 
managed,  defray  all  the  expenses  that  could  be  incurred  by  an  army  in  the 
enemy's  country." 

Several  changes  were  made  in  the  revenue  laws  with  the  view  of 
increasing  the  income  of  government.  And 

February  4,  an  act  was  passed  declaring  that,  from  and  after 
its  passage,  so  much  of  a  certain  act  as  provided  "for  the  bonding 
or  funding  of  the  promissory  notes  or  liabilities  of  the  government, 
be  repealed."  This  deprived  the  holders  of  "  red  backs"  of  even 
a  promise  to  pay  interest  on  their  demands. 

At  the  close  of  the  session,  February  5,  1841,  the  Speaker 
made  an  address  to  the  House,  in  which  were  the  following  re 
marks  : — 

"  We  are  a  nation  comparatively  without  means,  and  our  legislation  has 
to  be  based  upon  a  depreciated  and  depreciating  credit.  I  believe,  how 
ever,  I  may  safely  say,  that  we  have  accomplished  much  for  the  perma 
nence  and  prosperity  of  this  country.  The  regular  army  has  been  virtu 
ally  disbanded;  the  navy  has  been  laid  up  in  ordinary;  superfluous  offices 
have  been  abolished ;  and  our  appropriation  bill  this  year  is  not  more  than 
one-third  as  large  as  that  of  the  last." 

Dark  and  gloomy,  indeed,  were  prospects  when  the  Congress 
adjourned;  but  the  horizon  was  soon  to  become  bright,  as  will  be 
evident  from  the  following  extract  from  the  Austin  City  Gazette 
of  April  21,  1841 :— 


THE  FISCAL  HISTORY  OF  TEXAS.  107 

"THE  LOAN. 

"  PARIS,  February  4,  1840. 

"  To  the  Editor  of  the  New  York  Times  and  Star. 

11  SIR  :  As  the  commissioners  of  loans  of  the  Republic  of  Texas  were 
instructed  by  His  Excellency,  President  Lamar,  in  the  event  of  their  effect 
ing  a  negotiation  of  the  loan  for  that  Republic,  to  make  a  public  announce 
ment  of  the  fact,  that  meritorious  holders  of  the  securities  of  the  govern 
ment,  who  may  have  aided  the  country  in  the  hour  of  its  necessity,  may 
not  be  the  victims  of  the  speculation  of  those  acting  under  secret  informa 
tion,  I  will  thank  you  to  state  in  your  paper  that  I  have  this  day  concluded 
in  this  city  a  contract  with  the  Bank  of  Messrs.  J.  Lafitte  &  Co.  for  the 
Texan  loan.  *  *  * 

"J.  HAMILTON." 

In  a  few  days  afterwards,  April  28,  the  good  news  was  confirmed. 

"It  is  said  the  bonds  have  been  taken  by  the  house  of  Lafitte  &  Co.  at 
90  cents  in  the  dollar.  The  French  Government  have  guaranteed  their 
punctual  redemption.  The  whole  loan  is  negotiated." 

The  effect  this  produced  will  be  evident  from  what  was  said  by 
a  Texan,  writing  from  New  Orleans  under  date  of  April  10  : — 

"  Our  notes  and  bonds  have  now  all  sorts  of  prices.  *  *  *  I  am 
informed  by  pretty  good  authority  that  Captain  Wright,  of  New  York,  has 
had  a  letter  from  a  broker  in  New  York,  offering  him  fifty  cents  for  all  in 
hand  from  thirty  to  sixty  thousand,  and  that  he  will  not  sell." 

"  The  news  of  the  negotiation  of  a  loan  for  Texas,"  said  the  jV.  0.  Bul 
letin,  "has  a  most  beneficial  effect.  Texan  securities  have  experienced  a 
sudden  elevation  in  the  market,  and  the  process  may  be  expected  to  go  on 
until  they  obtain  to  the  par  quotation." 

Further  particulars  are  given  in  the  Austin  City  Grazette  of 
May  5 : — 

"Private  letters  from  New  Orleans  of  the  21st  ult.  quote  Texas  ten  per 
cent,  bonds  at  forty  cents;  eight  per  cent,  bonds  at  thirty-five;  promis 
sory  notes  at  thirty ;  and  furthermore  state  that  Texas  money  is  in  demand, 
and  looking  up." 

The  same  paper,  of  May  19,  extracts  from  the  Charleston  Pa 
triot  of  April  24  a  long  letter  dated  London,  March  9.  In  this, 
it  is  said  that  the  loan  had  been  negotiated  on  such  terms  that,  if 
the  guarantee  of  the  French  Government  were  procured,  the  bonds, 
to  the  amount  of  seven  millions  of  dollars,  would  be  brought  out  at 
ninety-five ;  but,  if  the  guarantee  could  not  be  procured,  at  fifty- 
five.  Among  other  things,  this  writer  says  : — 

"  It  is,  moreover,  understood  that  Mr.  John  Horseley  Palmer,  the  late 
able  head  of  the  Bank  of  England  (certainly  one  of  the  first  practical  finan- 


108  THE  FISCAL  HISTORY  OF  TEXAS. 

ciers  in  Great  Britain),  is  engaged  in  preparing  for  General  Hamilton  the 
plan  of  a  national  bank  for  the  Republic  of  Texas,  which  is  to  constitute 
a  reservoir  to  hold,  save,  and  distribute  through  a  sound  circulation  the 
benefits  of  the  loan  as  soon  as  it  is  realized.  In  case  this  bank  is  chartered, 
which  it  unquestionably,  will  be  by  Texas,  it  is  said,  in  circles  which  entitle 
the  report  to  no  small  credit,  that  General  Hamilton  is  making  offers  to 
Mr.  Jaudon,  the  late  able  and  distinguished  agent  of  the  Bank  of  the 
United  States  in  London,  to  go  out  to  Texas  in  the  autumn  to  take  charge 
of  this  financial  organ  of  the  Texan  Government.  Should  Mr.  Jaudon 
accept  this  situation,  the  progress  which  Texas  would  make  in  five  years 
would  transcend  in  value  twenty  years  of  successful  military  conquests  in 
Mexico.  She  cannot  pay  too  high  a  salary  for  such  a  man,  who  unites  to 
great  practical  efficiency  in  business,  accurate  and  comprehensive  views  of 
finance,  an  admirable  temper,  and  great  firmness  and  decision  of  cha 
racter.'' 

When  we  presented  to  the  reader  the  first  fiscal  report  of  the 
Provisional  Government  of  Texas,  we  told  him  to  "  despise  not 
the  day  of  small  things."  By  this  time,  we  hope  he  is  convinced 
both  of  the  wisdom  of  the  apostolic  injunction  and  of  its  special 
applicability  to  the  subject  selected  for  his  particular  meditation. 
Here  we  find  the  Government  of  Texas,  less  than  six  years  having 
elapsed,  already  in  debt  to  the  amount  of  six  or  seven  millions; 
proposing  to  run  in  debt  to  the  amount  of  seven  millions  more ; 
an  ex-Governor  of  the  Bank  of  England  preparing  a  plan  of  a 
national  bank  for  the  Republic ;  and  Mr.  Jaudon,  ex-cashier  of  the 
Bank  of  the  United  States,  preparing  to  remove  to  Texas,  to  perform 
for  that  Republic  all  those  functions  which  he  and  Mr.  Biddle 
together  had  performed  for  the  United  States. 

Some  time  afterwards,  unfavorable  reports  having  been  circu 
lated,  the  following  official  notice  was  issued: — 

"TREASURY  DEPARTMENT,  CITY  OF  AUSTIN,  June  29,  1841. 

"  To  quiet  all  apprehension,  and  to  remove  the  doubts  that  have  been 
created  by  recent  newspaper  publications,  it  is  thought  proper  to  give  this 
public  and  official  notice  to  all  whom  it  may  concern,  that  official  informa 
tion  has  been  received  by  the  Executive  of  the  positive  sale  of  our  bonds  by 
our  loan  commissioner  at  Paris;  the  proceeds  of  which  will,  it  is  con 
fidently  expected,  be  realized  in  the  city  of  New  York  in  the  course  of  the 
month  of  August  next. 

"JOHN  G.  CHALMERS, 

Secretary  of  Treasury." 

July  7,  the  editor  says, 

"  The  Loan. — Dispatches  were  received  by  the  Hon.  Secretary  of  the 
Treasury,  on  Monday  last,  from  our  loan  commissioner,  confirmatory  of  the 


THE  FISCAL  HISTORY  OF  TEXAS.  109 

information  published  in  our  last.  The  loan  is  obtained,  the  contracts  are 
signed,  and  the  specie  will  be  forthcoming  in  due  season.  We  have  seen 
the  documents." 

Various  were  the  suggestions  made  in  the  Texan  papers  as  to 
the  proper  disposition  of  the  money,  and  Alexander  Hamilton's 
Report  on  a  National  Bank  was  republished  to  aid  the  Texans  in 
coming  to  a  proper  conclusion. 

July  14,  the  Austin  City  G-azette  contained  a  letter  from  the 
loan  commissioner,  General  Hamilton,  dated  London,  May  18, 
a  part  of  which  we  must  quote : — 

"  Since  my  last  respects,  I  have  completed  my  contract  with  J.  Lafitte  & 
Co.  for  the  Texan  loan;  in  conformity  to  which,  he  issued  the  inclosed 
prospectus  and  explanatory  notice.  After,  in  writing  with  M.  Guizot,  and 
in  verbal  conference  with  the  king  and  Minister  of  Finance,  I  had  assured 
myself,  as  I  supposed,  of  the  favorable  disposition  and  protection  of  the 
French  Government  for  the  negotiation  of  the  loan  in  France.  After,  how 
ever,  the  prospectus  was  issued,  and  I  had  left  Paris,  to  superintend  the 
subscriptions  in  England,  the  Journal  des  Debats,  the  special  organ  of 
the  court,  came  out  with  a  strong  article  against  the  loan,  dissuading  the 
French  citizens  from  going  into  it  ]  and  in  the  Messager  and  Moniteur, 
M.  Humann,  the  Minister  of  Finance,  by  a  sort  of  semi-official,  took  a  simi 
lar  course." 

Messrs.  Lafitte  &  Co.  then  postponed  opening  the  books  for  re 
ceiving  subscriptions.  The  residue  of  Gen.  Hamilton's  letter  gives 
the  ground  of  his  strong  hope  and  expectation  that  this  difficulty 
would  be  adjusted. 

In  the  success  of  the  commissioner,  the  Texans  did  not  lightly 
abandon  their  hopes,  as  will  appear  from  the  following  extract 
from  the  Austin  City  G-azette  of  August  11 : — 

"  Rumors  having  been  rife  about  town,  for  the  last  few  days,  prejudicial 
to  the  loan,  we  made  all  necessary  inquiries  at  head-quarters  respecting 
their  truth,  and,  as  we  expected,  they  prove  to  be  without  foundation.  So 
far  from  any  unfavorable  accounts  having  been  received,  the  latest  inform 
ation  from  Hamilton  is  altogether  of  a  favorable  character.  He  states 
that  the  difficulties  between  M.  Lafitte  and  the  Minister  of  Finance  are 
amicably  adjusted.  He  adds,  in  a  letter  to  the  Hon.  B.  E.  Bee:  '  The 
books  will  be  opened  with  all  the  power  and  influence  of  the  House  (Lafitte 
&  Co.)  on  the  30th  of  June.  M.  Lafitte  has  resolved  to  carry  matter* 
through  triumphantly.'  " 

But  while  Gen.  Hamilton  was  exerting  all  his  financial  and 
diplomatic  powers  in  Paris,  there  were  proceedings  going  on  at 
Austin,  of  which  he  was  not  aware,  and  which  were  destined  to 
thwart  all  his  movements.  They  appear  to  have  commenced  early 


110  THE  FISCAL  HISTORY  OF  TEXAS. 

in  the  year ;  but  full  revelation  was  not  made  of  them  till  Septem 
ber'  1,  when  an  account  was  given  of  them  in  the  Austin  City 
G-azette,  so  much  of  which  as  is  necessary  we  shall  transcribe,  as 
we  cannot  trust  ourselves  to  tell  so  important  a  story  in  our  own 
words. 

After  alluding  to  a  statement  in  another  paper,  in  which  the 
difficulties  between  the  French  minister  to  Texas  and  the  high 
officers  of  the  Republic  were  attributed  to  "British  intrigue,"  the 
editor  proceeds  to  say : — 

if  The  difficulties  were  in  the  first  instance  altogether  of  a  private  and 
personal  character  between  M.  de  Saligny  and  Mr.  Bullock,  and  were  la 
mented  by  the  friends  of  both  parties;  the  difficulties  were  increased  by 
the  killing  of  Mr.  B/s  pigs  by  one  of  M.  de  S/s  servants,  whereupon  Mr. 
B.  assaulted  the  servant,  and  the  minister  made  his  complaint  to  the 
government.  The  district  attorney,  under  the  instruction  of  the  govern 
ment,  had  Mr.  Bullock  arrested  to  answer  for  said  assault,  and  the  District 
Court  not  being  in  session  at  the  time,  Mr.  B.  was  bound  in  heavy  recogni 
zances  to  appear  before  said  court  to  answer  the  charge.  Thus  that  matter 
stands  until  the  next  session  of  the  court  in  November  next.  As  might 
naturally  be  expected,  this  occurrence  still  further  embittered  the  feelings 
of  both  parties  to  such  an  extent  that,  in  April  last,  Mr.  Bullock,  who  keeps 
a  public  hotel  in  this  city,  meeting  M.  de  Saligny  on  his  premises,  ordered 
him  off.  M.  de  Saligny  immediately  made  a  second  complaint,  and  in 
sisted  on  the  immediate  punishment  of  Mr.  Bullock;  on  this,  Mr.  B.  was 
again  handed  over  to  the  judiciary,  and  bound  over,  as  in  the  former  case, 
to  answer  the  charge  at  the  term  of  the  District  Court.  A  long  and  warm 
discussion  took  place  between  the  French  minister  and  the  Texan  Secretary 
of  State,  and  the  whole  matter  has  been  referred  to  the  French  Govern 
ment. 

*  *  *  *  *  *  # 

"  In  conclusion,  we  would  remark  that  M.  de  Saligny,  who  is  brother-in- 
law  of  M.  Humann,  the  Minister  of  Finance  of  France,  is  expected  at  his 
residence  in  this  city,  in  the  course  of  the  present  month,  when,  it  is 
hoped,  everything  will  be  amicably  settled.  *  *  *  The  connection  thus 
existing  between  M.  de  Saligny  and  a  member  of  the  French  Cabinet  ac 
counts  for  all  the  obstacles  thrown  by  that  government  in  the  way  of 
Messrs.  Lafitte  &  Co.'s  fulfilment  of  their  contract  for  the  Texan  loau." 

The  Texas  Centinel,  of  May  6 — a  paper  of  politics  opposite  to 
those  of  the  Austin  City  G-azette — says: — 

"  We  are  authorized  in  saying  that  our  government  has  sent  on  a  re 
quest  to  the  French  Government  for  the  recall  of  M.  de  Saligny/7 

On  the  10th  of  June,  the  editor  devotes  more  than  a  column  to 
the  subject :  — 

"  Our  columns  will  not  permit  us  at  present  to  enter  into  a  full  detail  of 
the  ex-official  conduct  of  this  foreign  functionary.  *  *  Can  that  great 


THE  FISCAL  HISTORY  OF  TEXAS.  Ill 

and  wise  head  (Louis  Philippe)  of  one  of  the  mightiest  nations  of  the 
earth  look  for  an  instant  with  approbation  upon  the  conduct  of  M.  Saligny, 
in  knowingly  passing  counterfeit  money  upon  obscure  and  honest  citizens 
of  this  country — in  refusing  to  pay  his  tavern  bills — in  wantonly  destroy 
ing  the  property  of  our  citizens — in  smuggling  into  our  country  a  large 
amount  of  merchandise  for  commercial  speculation,  under  the  cloak  of 
his  diplomatic  privilege,  as  provisions?"  &c.  &c. 

Mr.  Bullock's  pigs  were  the  aggressors.  The  Texan  editors, 
with  an  amiable  partiality  for  everything  belonging  to  their  own 
country,  conceal  the  fact;  but  we  have  been  on  the  spot,  and  in 
quired  into  the  particulars.  M.  de  Saligny  had  a  number  of 
horses  which  were  fed  with  corn.  Mr.  Bullock's  pigs  intruded 
into  the  stables  to  pick  up  the  corn  the  horses  suffered  to  fall  to 
the  ground.  One  of  M.  de  Saligny's  servants  killed  some  of  the 
pigs.  Mr.  Bullock  whipped  the  servant.  This  enraged  M.  de  Sa 
ligny;  he  influenced  his  brother-in-law,  M.  Humann,  the  Minister 
of  Finance  at  Paris,  and  Gen.  Hamilton's  loan  was  defeated. 

We  have  had  occasion  to  observe  before  that,  however  the 
Texans  might  quarrel  among  themselves,  they  would  always  unite 
against  the  common  enemy,  the  Mexicans.  So  it  was  on  this 
occasion.  All  Texas  stood  by  Mr.  Bullock  and  his  pigs.  Hous- 
tonites  and  Anti-Houstonites  were  of  one  accord.  Nor  will  it  be 
too  much  to  say  that,  as  Rome  was  saved  by  the  cackling  of  geese, 
so  Texas  was  saved  by  the  squeaking  of  pigs.  If  the  loan  had 
been  obtained,  it  would  have  been  used  in  establishing  a  national 
bank,  by  which  every  dollar  would  have  been  made  to  look  like 
ten.  The  result  would  have  been  that  the  debt  of  Texas,  instead 
of  being  twelve  millions,  would  have  been  twenty-five,  thirty,  per 
haps  forty  millions.  The  most  intelligent  Texans  agree  in  opinion 
that  this  would  have  been  the  result.  All  honor,  then,  to  Mr. 
Bullock  and  his  pigs;  and  this  heretofore  much  despised  animal 
must  be  regarded  hereafter  as  possessed  of  classic  interest.  If  his 
figure,  carved  in  marble,  should  be  placed  over  the  entrance  of  the 
treasury  of  Texas,  it  would  serve  as  a  memento  to  future  ages  of 
his  having  been  the  salvation  of  the  Republic,  and  teach  Mr. 
Branch  Tanner  Archer's  "  thousands  and  millions,  born  and  un 
born,"  that  the  humblest  of  agents  may  be  instrumental  in  pro 
ducing  consequences  of  the  utmost  importance. 


112  THE  FISCAL  HISTORY  OP  TEXAS. 


CHAPTER    XVI. 

PROCEEDINGS  UNDER  THE  SIXTH  CONGRESS  :    NOVEMBER,  1841. 

Connection  of  events,  great  and  small — The  loan  defeated — Increased  confusion  in 
finances — The  Secretary  of  the  Treasury  suggests  that  all  debts  of  the  government 
be  funded  in  a  stock  bearing  two  and  a  half  per  cent,  interest — This  the  first 
suggestion  of  scaling  or  repudiation  in  Texas — Contrast  of  financial  affairs  at  the 
beginning  and  close  of  President  Lamar's  administration. 

SIR  WILLIAM  MOLESWORTH,  in  a  speech  in  Parliament,  spoke 
of  the  loss  of  an  axe  as  the  cause  of  one  war  between  the  Caffres 
and  the  British  in  South  Africa,  and  the  stealing  of  a  goat  as  the 
cause  of  another.  The  present  war  raging  in  that  region  is  said 
to  have  had  its  origin  in  a  cause  as  trivial  as  the  stealing  of  a 
hog.  One  chain  connects  together  all  events,  both  great  and 
small.  But  it  is  not  always  that  we  can  trace  the  connection  link 
by  link,  as  we  can  in  the  defeat  of  the  Texas  loan  commissioner  in 
Paris,  and  the  assault  on  Mr.  Bullock's  pigs  at  Austin. 

Did  the  Texans  anticipate  this  result  ?  We  believe  not.  They 
were  very  anxious  to  obtain  the  loan,  and  did  not  estimate  properly 
the  effects  of  offending  the  French  minister  at  Austin,  and  of 
getting,  through  him,  the  ill-will  of  his  brother-in-law,  the  Minister 
of  Finance  at  Paris.  More  conciliatory  measures  would,  no  doubt, 
have  been  adopted,  if  they  had  properly  appreciated  the  personal 
influence  of  these  two  functionaries.  But  so  far  were  they  from 
trying  to  conciliate  M.  de  Saligny,  that  they,  from  the  beginning, 
put  him  at  defiance.  When  Mr.  Bullock  was  arrested,  Mr.  Chal 
mers,  the  Secretary  of  the  Treasury,  went  bail  for  his  appearance, 
thus  identifying  the  Texan  Government  with  the  aggressive  tavern- 
keeper.  The  government,  also,  as  we  have  seen,  went  so  far  as  to 
demand  the  recall  of  M.  de  Saligny,  and  yet  it  did  not  give  up  all 
hopes  of  the  loan.  This  is  evident  from  the  message  which  Presi 
dent  Lamar  sent  to  the  sixth  Congress,  soon  after  the  commence 
ment  of  its  session  at  Austin,  November  1,  1841,  and  in  which  he 


THE  FISCAL  HISTORY  OF  TEXAS.  113 

expressed  his  regret  "  that  no  certain  and  positive  intelligence 
had  yet  been  received  from  our  loan  commissioners  in  Europe." 

Certainly  something  was  desirable  for  the  recuperation  of  the 
finances  of  the  Republic,  for  they  were  becoming  most  deplorable. 
The  disbursements  for  the  year  amounted  to  $1,176,288  72,  as 
stated  in  the  report  of  the  Secretary  of  the  Treasury  of  October, 
1841,  while  the  receipts  amounted  to  only  $442,604  67.  And  as 
both  receipts  and  disbursements  were  (except  $4,776  of  the  latter), 
in  the  inconvertible  paper  of  the  government,  the  revenue  was 
of  no  avail  either  to  the  government  or  its  creditors. 

The  debt  was  admitted  to  be  $5,782,798  81,  without  counting 
the  naval  debt,  and  a  number  of  unliquidated  claims.  These  latter 
were  becoming  very  embarrassing,  as  will  be  seen  by  the  following 
extracts  from  the  report  of  the  Secretary  of  the  Treasury  : — 

"  The  amount  of  floating,  unliquidated  debt  cannot  be  ascertained ;  there 
was  no  appropriation  to  meet  it,  and  the  department  was  compelled,  from 
necessity,  to  refuse  to  issue  auditor's  certificates  to  satisfy  such  claims, 
inasmuch  as  they  were  receivable  for  a  great  part  of  the  public  revenue,  and 
would,  in  all  probability,  have  absorbed  that  part  for  which  they  were  re 
ceivable.  A  half  million  would  be  amply  sufficient  to  cover  all  claims  of 
that  description,  which  would  swell  the  public  debt  to  $7,300,000,  including 
the  naval  debt  iu  the  total." 

Here  we  find  the  public  debt  becoming  so  embarrassing  that  the 
government  was  compelled  to  decline  issuing  the  proper  evidences 
of  the  amount  due  to  .the  public  claimants,  and  now,  for  the  first 
time,  we  find  any  reference  in  Texan  documents  to  the  subject  of 
scaling  or  repudiation.  In  this  point  of  view,  the  following  extracts 
from  the  report  of  the  Secretary  of  the  Treasury  become  inte 
resting: — 

"  The  question  arises,  what  plan  should  be  adopted  to  extinguish  this 
debt,  and  meet  the  current  expenses  of  the  government?  The  subject  is 
one  of  much  difficulty  and  embarrassment,  and  involves  so  much  conflict 
between  the  rights  of  the  creditors  and  the  interests  and  necessities  of  the 
government,  that  there  is  but  little  prospect  of  suggesting  such  a  plan  as 
will  meet  the  wishes  or  satisfy  the  expectations  of  all  parties  interested.  To 
repudiate  the  public  debt  altogether,  as  suggested  by  many,  would  justly 
stigmatize  us  as  a  people  in  the  eyes  of  all  enlightened  foreign  nations.  To 
meet  all  engagements  fully  and  promptly,  is  entirely  out  of  our  power. 
Necessity  compels,  therefore,  in  some  measure,  to  do  violence  to  our  sense 
of  justice,  as  well  as  to  the  rights  of  our  creditors,  in  adopting  a  compromise 
which  shall  guard  their  rights,  as  far  as  we  can  consistently  with  the  suc 
cessful  administration  of  the  government.  While  public  faith,  which  should 
be  held  sacred,  if  possible,  at  all  times,  would  seern  to  require  the  payment 
8 


114  THE  FISCAL  HISTORY  OF  TEXAS. 

of  our  engagements   '  to  the  uttermost  farthing/  still,  it  should  be  borne 
in  -mind,  that  we  have  not  received  full  consideration  for  our  liabilities  ;  ' 
and  if,  under  the  imperious  circumstances  of  Our  situation,  we  can  only  afford 
a  liberal  reimbursement  to  our  creditors  of  their  investment,  strict  justice 
will  have  been  obtained/' 

No  such  language  as  this  was  held  as  long  ras  it  was  possible  to 
borrow.  Up  to  this  date,  the  Government  and  the  people  of  Texas 
had  always  maintained,  that  what  they  promised  to  pay  they  in 
tended  to  pay.  They  had  never  said,  Though  we  promise  to  pay 
one  hundred  cents  on  the  dollar,  we  mean  to  pay  only- fifty  cents, 
or  thirty  cents,  or  twenty  cents,  or  as  much  as  to  ourselves  may 
seem  just  and  equitable.  If  they  had  said  so,  they  would  never  have 
been  able  to  borrow  one  dollar,  or  to  give  currency  to  their  trea 
sury  notes.  After  they  had,  however,  borrowed  as  much  as  they 
possibly  could,  in  every  possible  form — after  they  had  completely 
exhausted  their  credit — then  first  they  began  to  speak  of  departing 
from  the  letter  of  the  contract. 

There  is  little  hope  that  the  "right  of  creditors"  will  be  much 
respected  when  those  rights  come  in  collision  with  "  the  interests 
and  necessities"  of  government.  The  moment  that  a  necessitous 
government  finds  its  credit  so  completely  exhausted  that  it  can 
borrow  no  more,  in  that  moment  it  has  no  interest  in  keeping 
further  terms  with  its  creditors.  To  this  condition  of  things  was 
the  Government  of  Texas  reduced  at  the  close  of  President  Lamar's 
administration. 

Still,  it  is  interesting  to  see  with  what  apparent  reluctance  ideas, 
which  involve  a  violation  of  natural  justice,  are  at  first  promulgated ; 
even  by  statesmen  connected  with  the  administration  of  necessi 
tous  governments.  Mr.  Secretary  Chalmers,  it  will  be. observed, 
expresses  his  great  regret  that  Texas  could  not  fully  comply  with 
her  engagements.  "  Necessity  compels,  in  some  measure,  to  do 
violence  to  our  own  sense  of  justice,  as  well  as  to  the  rights  of  our 
creditors,  in  adopting  a  compromise."  Then  he  makes  an  attempt 
to  palliate  the  injustice  :  "  While  public  faith,  which  should  be  held 
sacred,  if  possible,  at  all  times,  would  seem  to  require  the  payment 
of  our  engagements  to  the  uttermost  farthing,  still,  it  should  be 
•borne  in  mind  that  we  have  not  received  full  consideration  for  our 
liabilities." 

Afterwards  he  goes  a  little   further.     He  had  commenced  by 


THE  FISCAL  HISTORY  OF  TEXAS.  115 

admitting  that  "  public  faith  should  be  held  sacred."  Then  he 
adduced  "necessity"  as  a  reason  for  its  violation.  Then  he  pro 
ceeds  to  palliate  this  violation  by  affirming  that  Texas  had  not 
received  as  much  as  she  had  promised  to  pay.  Finally,  he  per 
suades  himself  that,  if  Texas  cuts  down  the  amount  of  her  engage 
ments  one-quarter,  or  one-half,  "  strict  justice  will  be  obtained." 

Thus  it  is  with  individuals,  and  thus  it  is  with  nations,  whenever 
they  depart  from  the  strict  rule  of  right.  Ideas  of  laxity  in  com 
plying  with  engagements,  at  first  received  with  reluctance,  are 
afterwards  tolerated,  and  finally  sanctioned  as  being  all  that  strict 
justice  requires.  The  succession  of  ideas  contained  in  this  para 
graph  of  Mr.  Chalmers's  report  became  afterwards  the  history  of 
the  public  mind  in  Texas. 

He  then  proposed  that  the  whole  public  debt  should  be  merged 
in  one  consolidated  fund,  payable  in  twenty  years,  and  bearing  an 
interest  of  two  and  a  half  per  cent,  per  annum.  It  would  have 
been  well  for  the  creditors  if  such  a  project  could  have  been 
carried  into  execution.  But,  as  Texas  had  no  revenue  except  her 
own  worthless  paper,  it  was  just  as  impossible  for  her  to  pay  two 
and  a  half  per  cent,  as  to  pay  ten  per  cent.  All,  therefore,  that 
Mr.  Chalmers  did,  by  his  elaborate  treatment  of  the  subject,  was 
to  prepare  the  public  mind  in  Texas  for  practical  repudiation. 

But  let  not  more  blame  be  attached  to  this  gentleman  than  he 
deserves.  All  he  proposed  was  to  reduce  the  interest :  he  did  not 
suggest  the  scaling  of  the  principal.  The  guilt  of  calling  in  ac 
counts  which  had  been  regularly  audited,  and  the  negotiable  ac 
knowledgments  of  which  had  been  many  years  in  circulation,  must 
be  ascribed  to  those  who  followed  him. 

Thus  ended  the  unfortunate  administration  of  President  Lamar. 
When  he  entered  into  office  in  November,  1838,  the  treasury  notes, 
and  other  obligations  of  the  government,  were  at  from  sixty-five  to 
eighty-five  cents  in  the  dollar.  When  he  left  office  in  November, 
1841,  the  same  securities  were  worth  no  more  than  fifteen  to 
twenty  cents.  (See  General  Hunt's  Address,  pp.  4-6.)  During 
his  three  years  of  service,  the  public  debt  was  increased,  as  nearly 
as  can  be  ascertained,  from  $1,887,526  32  to  $7,300,000.  This 
was  not  owing  to  any  increased  necessity  the  Texans  had  for  defend 
ing  themselves  against  the  Mexicans.  It  was  owing  to  the  profusion 
and  extravagance  with  which  everything  was  conducted  under  the 


116  THE  FISCAL  HISTORY  OF  TEXAS. 

administration  of  this  amiable  but  misguided  man ;  which  extrava 
gance  and  profusion  were,  in  no  small  degree,  fostered  by  the 
hopes  which  were  entertained  of  the  negotiation  of  a  loan  in 
Europe. 


CHAPTER    XVII. 

PROCEEDINGS  UNDER  THE  SIXTH  CONGRESS,  IN  CONTINUATION  : 
NOVEMBER,  1841,  TO  NOVEMBER,  1842. 

General  Hunt's  view  of  financial  affairs  at  the  commencement  of  President  Houston's 
second  term — Exchequer  bills  issued — Treasury  notes  no  longer  received  for  cus 
toms  and  direct  taxes — Extra  session  of  sixth  Congress — Exchequer  bills  below 
par — Act  making  them  receivable  for  public  dues  at  only  their  market  rates — The 
preliminaries  for  a  loan  of  one  million  dollars  entered  into  with  Mr.  Bourgeois. 

WHILE  the  sixth  Congress  was  in  session  (December,  1841), 
General  Samuel  Houston  entered  upon  his  second  term  as  Presi 
dent  of  the  Republic.  Of  the  fiscal  embarrassments  he  "had  to 
encounter,  an  adequate  idea  may  be  obtained  from  the  preceding 
chapter,  taken  in  connection  with  the  following  extract  from 
General  Memucan  Hunt's  Address: — 

"The  small  loan,  obtained  by  the  loan  commissioner  at  Philadelphia, 
had  long  been  exhausted,  and  the  issues  of  the  government  had  very  greatly 
exceeded  the  means  of  payment  from  incomes  of  import  duties  and  direct 
taxation.  Indeed,  treasury  notes  were  down  to  fifteen  or  twenty  cents  in 
the  dollar.  This  state  of  things  forced  the  government  to  financial  acts 
neither  creditable  to  the  Republic  nor  agreeable  to  its  citizens;  but  it 
could  not  be  avoided.  Without  some  relief  to  the  currency,  the  wheels  of 
government  must  have  stopped.  No  officers,  except  the  chief  justice  and 
the  district  judges,  all  of  whom,  at  the  time,  were  creditors  of  the  govern 
ment,  and  some  of  them  for  considerable  sums,  received  salaries  sufficient  to 
support  them.  In  this  state  of  things,  Congress  passed  a  law,  January  18, 
1842,  repealing  the  act  of  19th  January,  1839,  requiring  all  officers  (the 
chief  justice  and  judges  excepted)  to  receive,  as  compensation,  the  trea 
sury  notes  of  the  government,  and  passed  what  is  familiarly  known  as  the 
1  Exchequer  Bill'  on  the  19th  of  January,  1842. 

"  The  provisions  of  this  law  were,  mainly,  that,  after  the  first  day  of  Feb 
ruary,  1842,  it  would  not  be  lawful  for  any  collector  of  the  customs  to  re 
ceive  anything  but  gold  or  silver,  or  the  ( exchequer  bills'  of  the  govern 
ment,  in  payment  for  imposts  or  duties;  and  that  it  was  not  lawful  for 
sheriffs,  or  collectors  of  direct  and  license  tax,  to  receive  anything  in  pay- 


THE  FISCAL  HISTORY  OF  TEXAS.  117 

ment  of  taxes,  except  gold  and  silver,  or  the  <  exchequer  bills'  of  the  govern 
ment.  President  Houston  was  authorized  to  issue  exchequer  bills,  payable 
on  demand,  and  receivable  in  payment  of  all  public  dues  to  an  amount  not 
exceeding  two  hundred  thousand  dollars,  and  exchequer  bills  were  to  be 
paid  out  for  no  other  purpose  than  to  carry  out  the  objects  of  the  general 
appropriation  act  of  Congress.  A  further  provision  authorized  all  land-dues 
(except  land-tax)  and  all  payments  for  patents  to  be  made,  as  heretofore, 
receivable  in  the  liabilities  of  the  government.  This  law  then  adds  that 
all  laws  and  parts  of  laws  previously  passed,  authorizing  the  issue  and  re 
issue  of  promissory  notes,  and  their  reception  in  payment  of  duties  or  taxes 
thereafter  to  be  assessed,  be  repealed/' 

As  this  law  made  treasury  notes  no  longer  receivable  (except 
for  arrears  of  duties  and  taxes),  it  deprived  them  of  nearly  all  the 
little  value  they  had  left.  They  fell  from  fifteen  and  twenty  cents 
in  the  dollar,  which  was  their  value  at  the  close  of  Lamar's  ad 
ministration,  to  ten  cents,  to  five,  to  four,  to  two  cents  in  the 
dollar.  Finally,  they  sunk  so  low  that  no  price  at  all  could  be 
obtained  for  them  in  many  parts  of  Texas. 

One  gentleman  has  told  us  that  he  gave  fifteen  dollars  in  trea 
sury  bills  "  for  three  glasses  of  brandy  and  water  without  sugar." 
We  have  heard  of  one  instance  in  which  a  fifty  dollar  treasury 
note  was  used  to  light  a  cigar ;  and  perhaps  some  were  applied  to 
still  more  ignoble  purposes. 

The  issue  of  exchequer  bills  then  commenced.  These  were,  in 
reality,  only  treasury  notes  under  a  new  name.  Like  the  u  red 
backs,"  they  were  promises  to  pay  what  the  government  had  not 
the  ability  to  pay;  and,  like  the  same  "red  backs,"  they  were  re 
ceivable  for  public  dues.  But  as  the  Congress  of  Texas  had,  by 
act  of  1842,  declared  that  treasury  notes  should  no  longer  be  re 
ceived  in  payment  of  duties  or  taxes,  no  one  could  tell  but  the 
Congress  would,  in  1843,  pass  a  similar  act  in  respect  to  exche 
quer  bills.  It  will,  therefore,  occasion  no  surprise  to  the  reader, 
when  he  is  told  that  there  was  difficulty  in  giving  currency  to  this 
new  emission.  The  merchants  refused  to  receive  them,  except 
when  they  could  get  nothing  else ;  and  when  they  did  receive 
them,  they  paid  them  in  immediately  for  customs.  The  conse 
quence  was  that  the  exchequer  bills  sunk  rapidly,  in  value,  to 
thirty-three  cents,  and  before  the  end  of  the  year,  to  even  twenty- 
five  cents  in  the  dollar. 

This  was  not  owing  to  the  extent  of  the  issues,  for  they  were, 
in  reality,  very  moderate,  there  being  seldom  so  many  as  fifty 


118  THE  FISCAL  HISTORY  OF  TEXAS. 

thousand  dollars  in  exchequer  bills  in  circulation  at  one  time.  It 
was  owing  to  the  bad  fiscal  management  of  the  Texan  Govern 
ment,  and  its  frequent  violations  of  public  faith,  depriving  it  of  all 
confidence  both  at  home  and  abroad.  When  the  issue  of  the 
*  'printed  treasury  notes"  commenced,  in  the  fall  of  1837,  though 
they  were  less  adequately  secured,  the  government  found  it  pos 
sible  to  throw  about  half  a  million  into  circulation,  and  keep  them 
nearly  on  a  par  with  specie,  for  a  period  of  several  months.  Even 
after  the  issues  were  swelled  to  nearly  a  million,  by  the  addition 
of  engraved  treasury  notes,  the  depreciation  was  so  gradual  that, 
by  the  end  of  the  year,  or  in  November,  1838,  the  notes  were  at 
eighty  cents  in  the  dollar.  But  in  1842,  the  public,  both  at  home 
and  abroad,  had  begun  to  regard  Texan  faith,  in  money  matters,  as 
very  like  Punic  faith,  and  a  small  emission  of  only  forty  thousand 
had  the  effect  of  sinking  their  value  to  the  extent  already  stated. 

The  fears  that  exchequer  bills  would  run  the  same  course  as 
treasury  notes  were  soon  realized.  "An  extra  session  of  the 
sixth  Congress  was  convened  by  the  President,  June  27,  1842  ; 
and  on  the  23d  of  July,  a  law  was  passed  requiring  the  collectors 
of  customs,  sheriffs,  clerks,  and  postmasters,  throughout  the  Re 
public,  to  receive  the  exchequer  bills  only  at  the  current  rates  at 
which  such  bills  were  sold  in  the  market." 

Thus,  in  less  than  six  months  after  the  law  was  passed  for  the 
issue  of  exchequer  bills,  was  violated  the  pledge  of  faith  that  they 
should  be  received,  at  their  face  value,  in  payment.  We  can 
readily  believe  General  Hunt,  when  he  says : — 

"This  act  of  Congress,  and  of  President  Houston,  gave  great  dissatisfac 
tion  to  many  citizens  of  the  Republic.  It  was  looked  upon  as  an  act  of  bad 
faith  without  justification,  as  the  whole  amount  of  exchequer  bills  which  the 
President  was  authorized  to  issue  could  not  exceed  two  hundred  thousand 
dollars,  all  of  which  could  have  been  cancelled  for  customs  and  direct  taxes 
in  a  year. 

"Had  the  government,  at  the  extra  session  of  Congress,  in  1842,  increased 
the  rates  of  import  duties  to  an  amount  double  or  treble  what  they  were, 
and  the  direct  taxes  in  the  same  ratio,  to  pay  the  officers'  salaries,  and  other 
expenditures,  in  currency,  or  exchequer  bills  worth  par,  it  appears  to  me 
it  would  have  been  better  and  more  satisfactory  than  the  repudiation  of  a 
part  of  the  amount  for  which  the  exchequer  bills  promised  to  be  worth  on 
their  face,  and  the  consequent  injury  it  did  to  the  credit  and  reputation  of 
the  Republic/7 

So  long  as  the  exchequer  bills  were  worth  but  thirty-three  cents 
in  the  dollar,  the  receipt  of  them  in  public  payments  at  their  full 


THE  FISCAL  HISTORY  OF  TEXAS.  119 

value  operated  as  a  practical  reduction  of  the  burdens  of  the  tax 
payers.  But  the  act,  requiring  that  they  should  be  received  for 
customs  and  other  public  dues,  at  their  market  rates,  instead  of 
the  amount  expressed  on  their  face,  did  not  cause  them  to  rise 
greatly  in  value.  To  this  fact  President  Houston  bears  testi 
mony,  in  his  message  of  December  1,  1842 : — 

"  The  exchequer  bills  being  thus  left  dependent  alone  on  import  duties 
for  their  redemption,  no  other  demand  existing  for  them,  depreciated,  and 
at  one  time  were  worth  in  market  but  twenty-five  cents  in  the  dollar, 
though  the  whole  amount  issued  up  to  this  time  is  only  one  hundred  and 
twenty-five  thousand  dollars,  and  the  amount  now  in  circulation  cannot  by 
possibility  exceed  thirty  thousand/' 

He  confirms  this  testimony  in  another  message,  dated  January 
7,  1843  :— 

"  The  Honorable  House  will  also  recall  to  their  recollection  the  fact  that 
the  money  has  been  depreciated  to  a  scale  never  above  fifty  cents,  and  for 
a  great  part  of  the  year  was  worth  but  thirty  cents  in  the  dollar." 

.  When  the  independence  of  Texas  was  unacknowledged,  when 
the  enemy  was  at  her  door,  when  the  issue  of  the  struggle  was 
doubtful,  but  before  she  had  violated  her  public  faith,  she  could 
issue  treasury  notes  to  the  amount  of  half  a  million,  and  keep 
them  in  circulation  for  months  without  any  sensible  depreciation. 
She  could  even,  as  we  have  seen,  increase  the  issue  to  a  million, 
and  they  would  still  be  worth  eighty  cents  on  the  dollar.  But,  in 
four  years  after  her  independence  had  been  achieved,  and  when 
it  was  recognized  by  France,  Britain,  Holland,  and  'the  United 
States,  she  could  not  keep  in  circulation,  at  one  time,  fifty  thou 
sand  dollars  in  exchequer  bills,  without  their  depreciating  to  fifty, 
thirty-three,  and  even  twenty-five  cents  in  the  dollar. 

Strange  as  it  may  seem,  at  this  very  time  negotiations  were 
carried  on  for  a  new  foreign  loan,  and  with  encouraging  prospects 
of  success,  as  appears  from  the  following  passage  in  the  report  of 
the  Secretary  of  the  Treasury,  November  1,  1842 : — 

"  On  the  14th  day  of  June  last,  a  contract  was  signed  in  New  Orleans, 
between  the  Hon.  Commission  on  the  part  of  the  government,  and  Mr. 
Alexander  Bourgeois  (d'Orivanne)  for  a  loan  to  Texas  of  one  million  of 
dollars;  the  first  instalment,  as  per  contract,  to  be  paid  within  six  months 
from  date  of  same.  The  powerful  interest  which  Mr.  Bourgeois  can  com 
mand,  and  which  will  be  exerted  in  favor  of  the  loan,  induces  the  belief 
and  expectation  that  the  proceeds  will  soon  be  available  to  our  govern 
ment." 


120  THE  FISCAL  HISTORY  OF  TEXAS. 

The  loan  was  not  effected;  but  for  what  reason  is  not  stated. 
But  the  sentiments  avowed  by  Mr.  Chalmers,  as  Secretary  of  the 
Treasury,  in  his  official  report,  ought  of  themselves  to  have  de 
feated  all  attempts  to  borrow.  When  the  highest  financial  func 
tionary  of  a  government  declares  that  such  a  government  has  a 
right  arbitrarily  to  modify  its  contracts,  nobody  ought  to  be  willing 
to  lend  to  it.  The  French  Government  was  very  anxious  to  esta 
blish  close  commercial,  if  not  political  connections  with  Texas. 
In  the  prosecution  of  this  object,  it  was  even  willing  to  overlook 
the  insult  to  its  minister,  M.  de  Saligny.  But  there  would  have 
been  gross  impropriety  in  its  guaranteeing  a  loan  to  a  government 
which  avowed  its  intention  of  departing  from  the  letter  of  the  con 
tract,  whenever  that  contract,  either  expressly  or  by  implication, 
provided  for  the  payment  of  a  premium  on  the  money  borrowed. 


CHAPTER    XVIII. 

PROCEEDINGS  UNDER  THE  SEVENTH  CONGRESS  :    NOVEMBER,  1842, 
TO  NOVEMBER,  1843. 

Gloomy  condition  of  public  affairs  .as  depicted  in  President  Houston's  message — 
The  removal  of  the  archives  of  the  Land-Office  forcibly  resisted — Exchequer  bills 
.     of  small  denominations  issued. 

THE  seventh  Congress  convened  at  Washington,  on  the  Brazos, 
November  14th,  1842.  On  the  first  of  December,  President  Hous 
ton  made  an  address  to  them  in  person,  in  which  he  gave  the  fol 
lowing  statement  of  the  condition  of  public  affairs  : — 

"  Since  the  commencement  of  legislation  in  Texas,  as  a  separate  and  in 
dependent  power,  we  find  the  proceedings  of  Congress  but  too  frequently 
paralyzed  by  acts  of  selfishness  and  partiality.  The  public  good  has  been 
too  often  disregarded,  and  the  national  interests  left  out  of  view;  and  thus, 
without  establishing  any  general  principle  or  system  of  legislation,  tempo 
rary  expediency  has  been  substituted  for  a  due  consideration  of  the  national 
good.  Under  this  state  of  things,  it  is  but  too  true  that  the  nation  has 
been  gradually  declining.  Instead  of  deriving  facilities  and  advantages 
from  the  lapse  of  time,  its  decline,  since  the  year  1838,  to  its  present  point 
of  depression,  has  been  more  regular  and  more  rapid  than  perhaps  that  of 
any  other  country  on  the  globe  possessing  the  same  natural  ad  vantages. " 


THE  FISCAL  HISTORY  OF  TEXAS.  121 

Fiscal  embarrassments  are  closely  connected  with,  and  in  part 
at  least  the  causes  of,  national  decline.  The  continued  prosperity 
of  the  United  States  has  been  owing,  in  no  small  degree,  to  the 
easy  condition  (a  few  years  only  excepted)  of  the  finances  of  the 
Federal  Government.  '  If  the  Government  of  Mexico  had  only  an 
adequate  revenue,  it  would  be  easy  for  it  to  restore  order  in  its 
different  provinces.  The  rapid  decline  of  the  Texans  as  a  nation 
was  owing  chiefly,  if  not  solely,  to  the  wrong  manner  in  which 
their  financial  affairs  were  conducted.  After  the  battle  of  San 
Jacinto,  they  never  had  any  serious  conflict  with  the  enemy.  Their 
troubles  were  of  their  own  creating,  and  to  be  traced  to  their  bad 
management  of  the  pecuniary  concerns  of  the  Republic. 

The  President  then  adverted  to  the  low  rate  at  which  exchequer 
bills  had  passed  in  the  market,  although  but  a  very  small  amount 
had  been  issued;  after  which  he  proceeded  to  speak  of  some  acts 
of  insubordination,  which  will  be  best  described  in  his  own  lan 
guage:— 

•  "  In  the  month  of  March  last,  during  the  incursion  of  the  enemy,  under 
the  provisions  of  the  constitution,  the  President  felt  it  his  imperative  duty 
to  order  the  removal  of  the  archives  and  heads  of  department  from  the  city 
of  Austin  to  a  place  of  safety.  *  *  *  Resistance,  however,  has  been 
offered,  and  continued  up  to  the  present  time.  Acts  of  the  most  seditious 
and  unauthorized  character  have  been  perpetrated  by  persons  styling  them 
selves  the  '  Active  Committee.'  " 

Of  the  proceedings  of  this  committee,  we  have  a  further  'ac 
count,  in  another  address  of  the  President,  delivered  on  the  4th  of 
January,  1843: — 

.t  "  .When  the  last  command  was  sent  to  Austin  for  the  removal  of  the 
archives,  the  Executive  contemplated  a  sufficient  force  to  have  effected  that 
object.  The  circumstances  attending  this  failure  are  reported  to  be  that 
the  command,  twenty  in  number,  arrived  at  Austin  on  the  30th  of  Decem 
ber,  and  on  the  same  day  placed  in  three  wagons  the  boxes  containing  the 
most  important  land-papers,  furnished  them  by  the  Commissioner  of  the 
General  Land-Office.  The  mob  of  resistance  increased  in  number  from  the 
time  that  the  object  of  the  visit  was  known;  and  before  the  wagons  left 
the  avenue,  the  arsenal  was  broken  open,  and  the  artillery,  charged  with 
grape  and  canister,  was  brought  lip  and  fired  on  the  wagons  and  teams. 
No  damage,  however,  was  done  to  them ;  and  only  two  shot  are  reported  to 
have  entered  the  General  Land-Office.  The  company  who  were  authorized 
to  take  the  archives  in  charge  continued  their  march  until  they  arrived  at 
Kinney's,  eleven  miles  from  Austin,  on  their  way  to  Caldwell  on  the  Brazos. 
They  encamped  at  Kinney's  for  the  remainder  of  the  night,  and  in  the 
morning  found  that  the  malcontents  had  placed  the  artillery  in  advance  of 


122  THE  FISCAL  HISTORY  OF  TEXAS. 

them,  and  represented  their  numbers  as  ninet}Miine  men.  Those  in  charge 
of  the  archives  not  having  sufficient  force,  left  them  and  returned  to  their 
homes — reporting  that  Capt.  Joseph  Daniel,  attached  to  the  General. Land- 
Office,  had  been  shot  at  several  times,  but  had  escaped,  leaving  his  family 
in  Austin.  What  injury  he  sustained,  is  unknown.  The  malcontents  also 
declared  to  those  employed  in  bringing  away  the  archives  that,  on  their 
return  to  Austin,  they  would  put  the  Commissioner  of  the  General  Land- 
Office,  Col.  Thomas  William  Ward,  to  death;  and  further  declared  that,  if 
the  President  had  been  taken  and  given  up  to  them,  they  would  freely 
have  surrendered  the  archives.  '  They  are  represented  to  have  been  in  a 
state  of  intoxication,  and  unreserved  in  their  threats  of  violence  against  the 
person  and  life  of  the  chief  magistrate  of  the  country." 

Acts  of  rebellion,  which  threatened  the  very  existence  of  the 
government,  could  add  nothing  to  the  value  of  Texan  securities. 
They  had,  however,  with  the  exception  of  exchequer  bills,  sunk  so 
low  already  that  it  was  not  possible  for  them  to  sink  much  lower. 
And  with  a  view  of  sustaining'  the  credit  of  these  bills,  an  act  was 
passed,  January  6,  requiring  the  Secretary  of  the  Treasury  so  to 
pay  them  out  as  never  to  have,  at  any  one  time,  more  than  fifty 
thousand  dollars  in  circulation.  .  Notwithstanding  the  restriction 
on  the  amount,  exchequer  bills  were,  during  the  year,  at  various 
stages  of  depreciation. 

The  original  act  had  required  the  issue  of  notes  of  the  denomi 
nations  of  one  hundred,  fifty,  twenty,  ten,  and  five  dollars.'  This 
new  act  made  it  the  duty  of  the  Secretary  of  the  Treasury  "  to 
issue  the  bills  in  the  denominations,  one,  two,  three,  five,  ten,  and 
twenty  dollars,  issuing  as  many  of  the  smaller  .denominations  as 
practicable." 

Exchequer  bills  were  subsequently  issued  for  seventy-five  cents, 
fifty  cents,  twenty-five  cents,'  and  twelve  and  a  half  cents.  Every 
effort  was  made  to  adapt  them  to  the  uses  of  the  community ;  yet  the 
whole  amount  issued  up  to  December  4, 1843,  was,  as  will  be  seen  by 
reference  to  Appendix  J,  only  one  hundred  and  thirty-seven  thou 
sand  two  hundred  and  eighty-one  dollars  and  seventy-one  cents.  Of 
this  amount,  never  more  than  fifty  thousand  were  in  circulation  at 
one  time.  The  amount  was  generally  much  less.  The  whole  amount 
in  circulation,  in  the  beginning  of  December,  1843,  was,  by  estimate, 
less  than  fourteen  thousand  dollars ;  yet,  in  October  of  that  year, 
exchequer  bills  were,  as  will  be  seen  by  reference  to  Appendix  J, 
worth,  in  most  parts  of  Texas,  no  more  than  sixty  cents  in  a 
dollar. 


THE  FISCAL  HISTORY  OF  TEXAS.  123 


CHAPTER   XIX. 

PROCEEDINGS  UNDER  THE  EIGHTH  CONGRESS  :    1843-44. 

Repudiation  denounced  by  President  Houston — The  negotiation  for  a  loan  with 
Mr.  Bourgeois  unsuccessful — Commencement  of  hard-money  policy — Low  rate 
of  exchequer  bills — Obje'ctions  to  paper  issues  receivable  for  public  dues. 

THE  eighth  Congress  assembled  at  Washington  December  4, 
1843.  The  President,  in  his  message  of  December  12,  gave  a 
gloomy  view  of  affairs.  Referring  to  a  particular  topic,  he  said : — 

"  It  may  be  as  well  to  allude  to  a  fact  which  has  greatly  prejudiced  the 
nation.  The  charge  that  we  had  repudiated  our  government  liabilities  has 
been  industriously  urged,  not  only  abroad  but  at  home,  as  a  cause  of  dis 
trust  and  an  accusation  of  bad  faith.  Other  governments  of  high  respect 
ability  have  done  so.  Texas  never  has,  and,  I  trust,  never  will." 

Through  nearly  two  pages  the  President  proceeded  in  the  same 
strain.  But  so  low  was  the  credit  of  the  Texan  Government, 
through  repeated  violations  of.  public  faith,  and  through  long- 
continued  financial  mismanagement,  that  nothing  could  raise  it. 

On  the  17th  of  January,  1844,  it  was  announced  that  nothing 
had  been  realized  from  the  contract  with  Mr.  Bourgeois.  And,  on 
the  27th  of  the  same  month,  means  were  even  taken  to  prevent  any 
such  negotiations  in  future,  by  enacting  "  that  all  laws  authorizing 
the  President  to  negotiate  a  loan  or  loans,  upon  either  the  public 
faith  or  the  hypothecation  of  the  public  lands,  be  and  the  same 
are  hereby  repealed."  A  previous  Congress  had  annulled  the 
five  million  loan  act :  this  abrogated  the  million. 

January  17,  an  act  was  passed  declaring  that 

"  All  bonds,  obligations,  or  recognizances,  hereafter  made  payable  to  the 
Republic,  or  the  President  of  the  same,  or  any  of  the  counties,  shall  be  held 
and  deemed  as  payable  and  recoverable  in  gold  and  silver  only  :  and  all 
fines,  hereafter  assessed  or  incurred,  shall  be  paid  in  gold,  or  silver,  or  ex 
chequer  bills,  any  law  to  the  contrary  notwithstanding/' 

Thus,  as  far  as  circumstances  would  admit,  did  Texas  now  adopt 
a  hard-money  policy. 

February  5,  an  act  was  passed  declaring  that,  after  the  first  of 


124  THE  FISCAL  HISTORY  OF  TEXAS. 

March  ensuing,  no  more  exchequer  bills  should  he  issued  until  the 
amount  in  circulation  should  be  reduced  to  twenty  thousand  dol 
lars;  after  which,' that  amount  might  be  kept  in  circulation,  but 
no  more. 

If  the  reader  will  turn  to  Appendix  J,  he  will  find  that,  though 
the  issue  of  exchequer  bills  was  reduced  so  low,  yet  in  but  few 
parts  of  Texas,  and  at  but  few  times,  from  January  to  July  31, 
1844,  were  they  at  par.  The  most  of  the  quotations  are  at  sixty, 
seventy,  seventy-five,  and  eighty  cents  in  the  dollar ;  and  in  one 
month,  at  Galveston,  the  chief  seat  of  commerce  and  customs,  they 
ranged  from  fifty  to  one  hundred. 

This  may  excite  surprise,  when  it  is  considered  that  the  net 
revenue  from  customs,  during  the  year  ending  July  31,  1844,  was 
nearly  one  hundred  and  seventy- eight  thousand  dollars.  But  it 
should  be  recollected  that,  as  they  were  receivable  at  the  custom 
house,  not  at  the  amount  expressed  on  their  face,  but  at  the  rate 
they  bore  in  the  market,  the  merchants  had  no  more  interest  in 
paying  them  in  than  in  paying  in  gold  or  silver.  Hence  it  will  be 
seen  that  the  payments  "in  par  funds,"  by  which,  it  is  to  be  pre 
sumed,  is  meant  metallic  money  or  its  equivalent,  nearly  equalled 
the  payments  in  exchequer  bills. 

This  fact,  in  connection  with  others,  shows  how  difficult  it  is  to 
keep  up  the  value  of  even  a  small  amount  of  paper-money  sup 
ported  solely  by  government  revenue.  It  is  not  the  annual,  but 
the  monthly,  and,  in  some  circumstances,  even  the  semi-monthly, 
amount  of  revenue  that  determines  the  amount  of  such  paper  that 
can  be  safely  issued. 

Our  banks  do,  indeed,  keep  a  large  amount  of  notes  in  circula 
tion,  but  it  is  only  by  redeeming  the  average  amount,  twelve  times 
or  oftener  in  each  year,  that  they  maintain  those  notes  on  a  par 
with  specie.  Government  must  do  likewise,  if  it  uses  a  paper 
currency  intended  to  serve  as  a  substitute  for  coin,  especially  if  it 
makes  its  issues  in  a  country  already  saturated  with  bank  paper. 
All  the  amount  of  circulating  notes  which  a  government,  with  a 
revenue  of  twenty-four  millions  a  year,  could  safely  issue,  would 
be  two  or  three  millions.  It  might,  indeed,  issue  twenty  or  thirty 
millions,  and  keep  it  in  circulation  for  a  time  on  a  par  with  specie. 
But  such  issues  would,  sooner  or  later,  be  sure  to  return  upon  it  in 


THE  FISCAL  HISTORY  OF  TEXAS.  125 

greater  amounts  than  the  monthly  revenue  could  absorb,  and  then 
the  public  credit  would  sustain  serious  injury. 

It  is  to  be  hoped  that  these  truths  will  be  remembered  by  the 
fiscal  authorities  of  the  United  States  the  next  time  they  are 
tempted  to  issue  treasury  notes  of  small  denominations  intended 
to  circulate  as  money.  But  two  or  three  millions  of  such  paper 
are  all,  as  has  been  shown,  that  a  government,  with  a  revenue 
of  twenty-four  millions,  can  safely  issue.  Nowa  two  millions  of 
surplus  revenue  will  pay  the  interest  on  forty  millions  of  stock  loans 
at  five  per  cent.,  and  on  thirty-three  millions  at  six  per  cent.  To  so 
much  greater  extent  can  government  borrow,  by  means  of  the 
funding  system,  than  by  resorting  to  issues  of  circulating  paper. 

The  serious  .embarrassments  of  the  United  States  Government 
in  the  war  of  1812-14  were,  in  part,  owing  to  disregard  of  these 
principles.  It  issued  treasury  notes,  and  received  them  in  payment 
of  public  dues,  whereby  it  left  itself  without  the  means  of  paying 
interest  on  stock  loans. 

Such  issues  do,  indeed,  afford  an  easy  way  of  relieving  the  im 
mediate  wants  of  a  necessitous  government ;  but  the  very  facility 
with  which  ways  and  means  can  thus  be  raised  is  no  small  objection 
to  them.  They  often  cause  the  postponement  of  those  efficient 
measures  which  ought  to  be  at  once  adopted. 

It  must  also  be  admitted  that  loans  made,  in  the  first  instance, 
by  means  of  treasury  notes,  seem,  in  some  respects,  more  eligible 
than  loans  of  gold  and  silver.  By  their  means  government  bor 
rows,  from  day  to  day,  just  such  sums  as  it  wants,  and  just  where 
it  wants,  and  has  no  large  amount  of  money  lying  dead  on  hand. 
In  this  way,  also,  it  avoids  deranging  the  operations  of  the  banks, 
as  may  be  done  by  large  stock  loans  of  gold  and  silver  taking  from 
them,  though  temporarily,  their  specie  basis.  But  all  these  ad 
vantages  may  be  secured,  and  the  evils  above  spoken  of  be  avoided, 
by  issuing  notes,  not  receivable  for  duties,  but  bearing  a  moderate 
rate  of  interest,  and,  if  not  paid  by  a  certain  day,  fundable  in  a 
stock  loan,  bearing  a  higher  rate  of  interest. 

Treasury  notes,  receivable  for  public  dues,  should  never  be  used, 
unless  it  be  to  relieve  a  temporary  embarrassment,  and  when  it  is 
reduced  almost  to  a  certainty  that  government  will,  in  a  few 
months,  have  a  surplus  revenue  sufficient  to  redeem  them. 


126  THE  FISCAL  HISTORY  OF  TEXAS. 

The  difference  of  one  or  two  per  cent.,  which  treasury  notes, 
receivable  for  public  dues,  would  bring  in  the  market  over  treasury 
notes  simply  funddble,  ought  to  be  regarded  as  of  little  account, 
so  very  important  is  it  that  government  should  always  have  a 
revenue  in  something  else  than  its  own- paper. 


CHAPTER    XX. 

.    PROCEEDINGS  UNDER  THE  NINTH  CONGRESS  :    1844-45. 

The  finances  somewhat  improved — Contrast  of  expenditures  in  Lamar's  and  Hous 
ton's  second  terms — Idem  of  imports  and  exports — Sound  views  of  President 
Jones — The  further  issue  prohibited  of  exchequer  bills,  and  other  paper  intended 
to  pass  as  money — The  receipt  of  paper  for  public  dues  forbidden. 

THE  ninth  Congress  assembled  at  Washington  December  2, 
1844.  In  a  message  delivered  to  them,  a  few  days  afterwards, 
December  7th,  President  Houston  said  : — 

"  It  is  believed  the  receipts  from  the  various  sources  of  revenue  will,  at 
least,  equal  the  expenditure — perhaps  leave  a  small  surplus  in  the  treasury." 

This  state  of  affairs  was  very  different  from  that  of  former  years, 
and  shows  what  can  be  done  by  persevering  economy. 

In  the  three  years  of  President  Lamar's  administration,  from 
December,  1838,  to  December,  1841,  the  public  debt  was  swelled 
from  less  than  two  millions  to  more  than  seven  millions. 

In  the  three  years  of  President  Houston's  administration,  from 
December,  1841,  to  December,  1844,  no  additions  appear  to  have 
been  made  to  the  debt,  except  by  increments  of  interest,  and  by 
the  bringing  in  of  back  accounts. 

In  the  three  years  of  President  Lamar's  administration,  the 
Treasurer's  payments  were,  according  to  the  best  accounts  that 
can  be  gathered,  as  follows  : — 

«  Year  ending  September  30,  1839,     .         .        $1,504,173  58 
«  "          "    1840,     .         .         2,174,752  74 

«  «          «    1841,     .         .  .       1,176,288  72 

$4,855,215  04 
""  Average  amount  per  annum,  $1,618,405." 


THE  FISCAL  HISTORY  OF  TEXAS.  127 

In  the  three  years  of  President  Houston's  second  term  these 
payments  "were,  besides  $17,907  30  on  account  of  the  mail  service 
and  collecting  of  taxes,  as  follows  : — 

"Disbursed  for  appropriations  of  1842,    .         .       $198,05100 
«  "  1843,    .         .        147,274  38 

"  "  1844,    ,        .         147,850  32 

$493,175  70     . 

"  Average  amount  per  annum,  including  mail  service,  and  collection  of 
taxes,  $170,361." 

This  difference  is  owing,  in  part,'  only  to  differences  in  the  cha 
racter  of  the  men  who  presided  over  the  government.'*  President 
Laimir,  as  a  paper-money  man,  was  profuse  on  principle.  He 
knew  of  no  limit  on  expenditure  but  the  limit  of  credit.  Pre 
sident  Houston,  as  somewhat  of  a  hard-money  man,  was  more 
inclined  to  economy.  But  if  Houston  had  been  Chief  Magistrate 
from- 1838-39  to  1841-42,  he  could  have  restricted  but  in  part 
the  extravagant  expenditures  of  these  years.  And  if  Lamar  had 
succeeded  him,  he  would  have  been  compelled,  from  the  force  of 
circumstances  (however  contrary  it  might  have  been  to  his  nature), 
to  be  in  some  degree  economical. 

If  it  had  been  possible  for  the  Texans  to  be  hard-money  and 
prompt-payment  men,  they  might  have  achieved  their  independ 
ence,  and  defrayed  all  the  expenses  of  the  Republic,  at  a  cost 
of  two  hundred  thousand  dollars  a  year.  This  may  seem  a  small 
amount,  but  neither  nations  nor  individuals  know  how  little  is 
necessary  to  sustain  them  till  necessity  forces  them  to  make  the 
experiment.  The  disbursements  in  the  last  term  of  President 
Houston  show  that  our  estimate  is  within  bounds.  During  Lamar's 
administration,  the  Mexicans  only  threatened.  During  Houston's 
second  term,  they  made  an  incursion  into  the  country. 

But  the  Texans  never  became  economical  till  constrained  by 
necessity.  So  long  as  there  was  any  hope  of  negotiating  a  loan  in 
Europe,  and  so  long  as  they  could  borrow  from  the  citizens  of  the 
United  States,  by  new  issues  of  treasury  notes,  their  extravagant 
expenditures  were  continued. 

When  they  were  reduced  to  such  straits  that  they  could  borrow 
no  longer,  except  from  themselves,  and  then  only  to  a  limited 
amount,  in  anticipating  the  revenue  by  issues  of  exchequer  bills, 
then  they  became  saving. 


128  THE  FISCAL  HISTORY  OF  TEXAS. 

We  have  not  the"  means  of  instituting  such  a  comparison  of  the 
commerce  of  the  country  as  is  desirable,  for  we  have  not  been  able 
to  find  any  account  of  the  imports  and  exports  for  part  of  the  time ; 
but  the  following  items  prove  that  its  foreign  commerce  was  much 
greater-^  during  part  of  Lamar's  than  during  part  of  Houston's 
second  term: — 

Imports.  Exports, 

Year  ending  Sept.  1,  1839,  $1,506,897  67  $274,518  09 

"  "         1840,  1,378,568  98  220,401  15 


2,885,46665  494,91924 


Average  per  annum,  $1,442,733  32  J  $247,459  62 

Year  ending  July  31,  1843,  $471,205  32  $415,768  75 

"  «  1844,  686,50303  '615,11934 


1,157,708  35  1,030,888  09 


Average  per  annum,  $578,854  17  $506,444  04 

These  tables  show  how  effective  excess  of  paper  currency  is  in 
encouraging  imports,  and  discouraging  exports.  The  imports,  in 
two  years  of  Lamar's  administration,  when  treasury  notes'  were 
the  circulating  medium,  were  nearly  six  times  as  great  as  the  ex 
ports.  On  the  contrary,  in  two  years  of  Houston's  second  term, 
when  such  notes  were  no  longer  current,  the  exports  nearly 
equalled  the  imports. 

These  tables  show  more.  They  show  to  what  extent  contribu 
tions  were  levied  on  citizens  of  the  United  States,  in  Lamar's  time, 
by  means  of  Texan  promises  to  pay,  for  nine-tenths  of  the  im 
ports  were  from  the  United  States,  and  were  paid  for,  if  paid  at 
all,  in  Texan  treasury  notes,  and  other  evidences  of  Texan  debts. 
In  these  two  years,  the  imports  exceeded  the  exports  in  the  aggre 
gate  sum  of  $2,390,547  41.  All  this  was  a  levy  on  citizens  of  the 
United  States ;  for  Texan  securities  had  no  market  in  Europe. 

Dr.  Anson  Jones,  who  succeeded  Gen.  Houston  as  President  of 
the  Republic,  delivered  his  inaugural  address  on  the  9th  of  De 
cember,  1844.  Prominent  points  in  it  were: — 

"The  maintenance  of  the  public  credit,  and  the  preservation  of  the 
national  faith,  both  as  it  regards  individuals  and  nations. 


THE  FISCAL  HISTORY  OF  TEXAS.  129 

"The  entire  abolishment  of  paper-money  issues  by  government,  corpora 
tions,  or  individuals,  and  the  consequent  introduction  of  an  exclusive  hard- 
money  currency." 

In  a  message  dated  December  16,  he  expatiated  somewhat  at 
length  on  these  points: — 

"Circumspect  as  was  the  preceding  administration  in  holding  the  reins 
in  the  emission  of  exchequer  money,  it  created  a  sort  of  illusion  as  to  the 
fiscal  ability  of  government,  which  was  made  manifest  in  the  extraordinary 
amounts  of  private  appropriations  by  the  different  sessions  of  Congress. 
These  appropriations,  it  is  true,  were  in  a  great  measure  arrested,  but  only 
by  the  exercise  of  that  power  vested  in  the  Executive  which  is  always  used 
with  great  reluctance. 

"  The  urgent  necessity  which  three  years  since  required  of  the  govern 
ment  a  resort  to  the  issue  of  exchequer  bills,  has  now  ceased  to  exist,  and 
the  continuance  of  the  system  is  no  longer  justified. 

"  The  fallacy  and  the  danger  of  a  factitious  paper  currency  have  been 
demonstrated  by  every  civilized  nation  upon  the  earth,  and  Texas,  having 
once  participated  in  this  demonstration,  should  now,  when  she  is  able  to  do 
so,  abandon  the  experiment,  and  resort  in  time  to  what  the  experience  of 
the  past  has  conclusively  shown  to  be  the  only  safe  expedient  for  govern 
ments — a  hard-money  currency,  as  a  circulating  medium.  As  a  commer 
cial  convenience,  recourse  may  be  had  to  a  system  of  treasury  drafts,  drawn 
against  specie  in  actual  deposit." 

In  conformity  with  this  recommendation,  an  act  was  passed 
February  3,  1845,  repealing  the  law  authorizing  the  issue  of 
exchequer  bills,  and  forbidding  the  Secretary  of  the  Treasury,  or 
any  other  officer  of  the  government,  to  issue  any  bonds,  notes, 
bills,  or  other  description  of  paper  representing  money,  intended 
for  circulation,  or  to  be  received  in  payment  of  any  class  of  reve 
nue,  and  requiring  the  Secretary  to  cause  to  be  destroyed  all  the 
exchequer  bills  received  at  the  treasury  department.  This  law 
further  provided  that,  after  the  receipt  of  the  whole  amount  of 
exchequer  bills  in  circulation,  and  such  other  paper  liabilities  of 
the  government  as  were  in  circulation,  and  were  receivable  by  law 
for  dues  to  the  government,  nothing  but  gold  and  silver  should  be 
received,  except  for  land-patents,  and  other  land-office  dues,  which 
might,  as  before,  be  received  in  the  liabilities  of  the  government. 

So  much  of  this  law  as  prohibited  the  receipt  of  Texas  govern 
ment  paper  in  payment  of  public  dues  was  a  violation  of  the  oft- 
plighted  faith  of  the  Republic.  But  it  put  an  end,  for  the  present, 
to  the  paper-money  system  of  Texas.  And  at  the  request  of  Pre 
sident  Jones,  we  make  a  special  record  of  the  fact  that  his  signa 
ture  was  never  affixed  to  a  paper  bill  of  credit. 


130  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    XXI. 

PROCEEDINGS  UNDER  THE  NINTH  CONGRESS,  CONTINUED  I    1845. 

The  Congress  of  the  United  States  pass  a  resolution  for  annexing  Texas  to  the 
Union — The  people  of  Texas,  in  convention,  assent  to  the  terms,  and  adopt  a 
constitution  for  the  State  of  Texas — Provisions  in  relation  to  public  debt  and 
government  paper-money — Extract  from  report  of  Commissioner  of  General  Land- 
Office — Great  extent  of  land  held  by  individuals — View  of  public  lands  as  a 
means  of  paying  public  debts. 

BETTER  times  for  Texas  were  at  hand.  On  the  1st  of  March, 
1845,  the  President  of  the  United  States  approved  of  a  joint  reso 
lution  of  the  Senate  and  House  of  Representatives  for  annexing 
Texas  to  the  Union.  In  this  resolution,  it  was,  among  other 
things,  declared  that — 

"  Said  State  *  *  *  shall  also  retain  all  the  vacant  and  unappropri 
ated  lands  lying  within  its  limits,  to  be  applied  to  the  payment  of  the  debts 
and  liabilities  of  Texas,  and  the  residue  of  said  lands,  after  discharging  said 
debts  and  liabilities,  to  be  disposed  of  as  said  State  may  direct ;  but  in  no 
event  are  said  debts  and  liabilities  to  become  a  charge  upon  the  Govern 
ment  of  the  United  States." 

Thus  was  provision  sought  to  be  made  that  Texas  should  retain 
all  her  lands,  and  at  the  same  time  pay  all  her  debts — the  said 
lands  to  be  set  aside  as  a  special  fund  for  the  payment  of  the 
debts,  and  only  the  residue  thereof,  after  the  debts  should  be  dis 
charged,  to  be  applied  to  such  other  purposes  as  the  State  might 
direct. 

June  16, 1845,  an  extra  session  of  the  ninth  Congress  was  con 
vened  at  Washington,  on  the  Brazos,  to  take  into  consideration 
the  resolution  of  annexation.  This  body  approved  of  the  procla 
mation  of  the  President  of  Texas,  of  May  5,  authorizing  an  elec 
tion  for  delegates  to  meet  in  convention,  July  4,  1845,  for  the 
purpose  of  acquiescing  in  the  annexation  of  Texas  to  the  Union, 
and  adopting  a  constitution  for  the  State. 

On  the  4th  of  July,  1845,  the  Convention  met  accordingly,  in 
the  city  of  Austin,  and  in  the  name  of  the  people  of  the  Republic 


THE  FISCAL  HISTORY  OF  TEXAS.  131 

of  Texas,  assented  to  the  annexation  of  Texas  to  the  United  States, 
on  the  condition  and  guarantees  of  the  said  joint  resolution  of  the 
Congress  of  the  United  States.  In  the  ordinance  then  adopted, 
the  first  paragraph,  after  reciting  the  joint  resolution  for  annex 
ing  Texas  to  the  United  States,  declares  that — 

"  In  order  to  manifest  the  assent  of  the  people  of  this  Republic,  as  re 
quired  in  the  above-recited  portions  of  the  said  resolution,  we,  the  deputies 
of  the  people  of  Texas,  in  convention  assembled,  in  their  name,  and  by  their 
authority,  do  ordain  and  declare  that  we  assent  to,  and  accept  the  pro 
posals,  conditions,  and  guarantees  contained  in  the  first  and  second  sec 
tions  of  the  resolution  of  the  Congress  of  the  United  States  aforesaid." 

Thus  did  the  people  of  Texas,  in  convention  assembled,  acknow 
ledge  the  obligation  of  the  debts  incurred  by  the  government  of 
the  Republic.  Thus  did  they  guarantee  the  United  States  against 
all  claims  on  account  of  said  debts.  And  thus  did  they  consent 
that  "  all  the  vacant  and  unappropriated  lands  lying  within  the 
limits  of  Texas  should  be  applied  to  the  payment  of  the  debts  and 
liabilities  of  Texas;"  and  that  only  the  residue  of  said  lands, 
after  discharging  such  debts  and  liabilities,  should  be  disposed  of 
as  said  State  might  direct. 

Its  view  of  the  evils  of  "government  paper-money  and  of  public 
debt,  the  Convention  embodied  in  the  following  provisions  of  the 
constitution: — 

"Art.  VII.  Sec.  8.  And  in  no  case  shall  the  legislature  have  the  power 
to  issue  treasury  warrants,  treasury  notes,  or  paper  of  any  description  in 
tended  to  circulate  as  money. 

"  Art.  VII.  Sec.  33.  The  aggregate  amount  of  debts  hereafter  con 
tracted  by  the  legislature  shall  never  exceed  the  sum  of  one  hundred  thou 
sand  dollars,  except  in  case  of  war,  to  repel  invasions,  or  suppress  insur 
rections." 

The  provision  to  prohibit  the  issue  of  treasury  notes  and  trea 
sury  warrants  was  adopted  by  a  vote  of  forty-five  yeas  to  thirteen 
nays. 

August  5,  the  Commissioner  of  the  General  Land-Office  made  a 
report,  a  part  of  which  it  is  proper  to  introduce  here.  Inasmuch  as 
the  customs,  the  chief  source  of  Texan  revenue,  were  to  be  trans 
ferred  to  the  United  States,  little  would  remain  but  the  public 
lands  wherewith  to  pay  the  debts  incurred  under  the  government 
of  the  Republic. 

"Superficial  exteat  of  Texas,  as  comprised  within  the  limits  define  1  by 
statute  of  first  Texan  Congress,  page  133,  379,319  square  miles:  or, 
254,284,160  acres. 


132  THE  FISCAL  HISTORY  OF  TEXAS. 

"  Total  amount  of  land  issued  by  the  various  boards  of  land  commis 
sioners,  43,543,970  acres. 

"  Total  amount  recommended  from  the  above,  as  good  and  lawful  claims, 
by  the  committee  appointed  to  detect  fraudulent  certificates,  19,212,206 
acres. 

"Total  amount  issued  by  Department  of  War  as  bounty  and  donation 
claims,  6,300,000  acres. 

"  Total  amount  of  land-script  sold  by  the  government  of  the  late  Re 
public  of  Texas,  368,787  acres. 

"  Total  amount  of  legal  claims  to  land  issued  by  the  authorities  of  Texas, 
25,880,993  acres. 

"  Total  amount  issued  by  various  boards  of  land  commissioners,  and 
supposed  to  be  fraudulent,  24,331,764  acres. 

"Total  amount  of  land  issued  by  the  authorities  of  Mexico,  a  portion  of 
which  is  supposed  to  be  invalid,  22,080,000  acres. 

"  Total  amount  of  public  domain  subject  to  location  and  unsurveyed, 
181,99 1,403  acres." 

To  enable  tbe  reader  to  form  some  idea  of  the  quantities  above 
set  forth,  it  is  proper  to  state  that  the  amount  issued  by  the 
Department  of  War  as  bounty  and  donation  claims  (six  million 
acres)  was  more  than  double  the  area  of  the  State  of  Connecticut, 
exceeded  the  territorial  surface  of  either  New  Jersey  or  New 
Hampshire,  and  was  greater  than  that  of  Massachusetts  and 
Rhode  Island  put  together.  The  total  amount  of  issues  by  the 
Mexican  Government  (twenty-two  million  acres)  exceeded  the 
whole  of  New  England,  exclusive  of  Maine.  The  issues  under 
Texan  boards  of  commissioners,  supposed  to  be  fraudulent  (twenty- 
four  million  acres),  were  nearly  equal  in  extent  to  the  State  of 
Ohio.  The  whole  amount  appropriated  by  both  the  Texan  and 
Mexican  authorities  (seventy-two  million  acres)  exceeded  what  is 
contained  in  the  States  of  New  York,  New  Jersey,  Pennsylvania, 
Maryland,  and  the  District  of  Columbia.  Texas,  with  a  popula 
tion  of  about  one  hundred  thousand,  had  more  land  appropriated 
for  individual  use  than  is  to  be  found  in  the  four  central  States 
above  mentioned,  having  an  aggregate  population  of  six  millions 
and  a  half.  If  nothing  else  will,  this  fact  ought  to  convince  the 
reader  of  the  magnificent  scale  on  which  land-speculations  have 
been  carried  on  in  Texas ;  and  in  these  land-speculations  he  will 
find  the  key  to  all  important  events  in  Texan  history. 

But  great  as  was  the  amount  of  land  claimed  by  individual 
owners,  it  was  less  than  one-third  of  all  the  land  in  the  country. 
The  amount  of  public  domain  still  subject  to  location,  and  remain- 


THE  FISCAL  HISTORY  OF  TEXAS.  133 

ing  unsurveyed  (one  hundred  and  eighty-one  million  acres),  was 
equal  in  extent  to  the  States  of  Virginia,  North  Carolina,  South 
Carolina,  Georgia,  Kentucky,  and  Tennessee.  Compared  with  the 
North-Western  States,  it  greatly  exceeded  in  extent  Ohio,  Indiana, 
Michigan,  Illinois,  and  Missouri. 

August  27,  a  committee  made  report  that  236,803  square  miles 
of  the  surface  of  Texas  were  appropriated,  leaving  160,516  un 
appropriated.  Referring  to  sales  of  the  public  lands,  as  a  means 
of  paying  the  public  debt,  and  supposing  the  sales  to  be  continued 
for  thirty-seven  years,  the  committee  say: — 

"  If  it  can  be  sold  at  that  time  (1882)  for  $1  25  per  acre,  the  public- 
domain  of  Texas  will  be  worth,  in  the  year  1882,  $128,462,400. 

"  If  the  accounts  of  traders  and  travellers  are  entitled  to  credit,  one-half 
of  this  country  is  suitable  for  the  occupancy  of  the  agriculturist.  Deduct 
ing,  then,  one-half  for  sterile  wastes  and  mountain  ranges,  the  present 
worth  of  this  fund,  at  6  per  cent.,  will  not  meet  the  public  debt  of  Texas." 

According  to  the  report  of  the  Commissioner  of  the  General 
Land-Office,  "  the  amount  of  public  land  subject  to  location,  and 
unsurveyed,"  was  181,991,403.  If  to  this  be  added  "the  amount 
issued  by  various  boards  of  land  commissioners  and  supposed  to 
be  fraudulent,"  24,331,764  acres,  the  sum  will  be  206,323,167 
acres;  and  some  addition  should  be  made  from  the  "  total  amount 
issued  by  the  authorities  of  Mexico,  22,080,000  acres,  a  portion 
of  which  was  supposed  to  be  invalid."  Suppose  one-half  of  these 
invalid,  and  we  have  a  grand  total  of  217,363,167  acres. 

Such  was  the  land-fund  at  the  disposal  of  the  government  of 
Texas,  according  to  the  report  of  the  Commissioner  of  the  Gene 
ral  Land-Office.  But  the  committee  of  the  Convention  reduced 
it  to  102,780,240  acres.  In  so  doing,  they  seem  to  have  taken 
into  the  account  all  the  "  head-rights"  or  settlers'  claims,  and 
soldiers'  rights,  not  yet  "located,"  and  also  the  enormous  grants 
made  by  the  united  State  of  Coahuila  and  Texas,  which  the  in 
dependent  government  of  Texas  had  steadily  refused  to  acknow 
ledge.  The  commissioner  gives  the  extent  of  land  "  subject  to 
location,  and  unsurveyed."  The  committee  give  the  amount  "  un 
appropriated." 

Even  this  reduced  amount  is  but  little  inferior  to  the  territorial 
surface  of  all  our  States  on  the  seaboard,  from  Maine  to  Penn 
sylvania  inclusive.  Yet  the  committee  state  that,  supposing  one- 
half  of  these  lands  to  be  waste,  the  residue,  56,365,125  acres, 


134  THE  FISCAL  HISTORY  OF  TEXAS. 

will  not,  by  the  year  1882,  if  sold  at  $1  25  an  acre,  discharge  the 
public  debt  of  Texas,  then  less  than  twelve  millions  of  dollars. 

The  committee  may  be  right,  supposing  the  debt  to  go  on  accu 
mulating  till  the  year  1882,  at  compound  interest,  at  the  rate  of 
6  per  cent,  per  annum,  and  supposing  no  sales  of  land  to  be  effected 
till  that  year.  But,  supposing  the  sales  to  commence  immediately, 
and  only  enough  to  be  sold  in  each  year  to  pay  the  interest  on  the 
debt,  and  reduce  the  principal  a  few  hundred  thousand  dollars, 
the  whole  would  be  liquidated  in  much  less  time  than  is  stated  in 
the  report  by  the  committee. 

But  her  lands  were  not  all  that  Texas  had  pledged  to  her  public 
creditors.  In  addition  thereto,  she  had  pledged  her  custom 
revenues,  her  direct  taxes,  her  license  taxes,  and,  what  is  more 
than  all,  her  public  faith,  which  amounted  to  a  pledge  of  every 
thing  she  possessed,  or  might  hereafter  possess.  If  she  trans 
ferred  any  of  these  pledged  revenues,  the  customs  for  example,  to 
a  third  party,  she  was  bound,  on  principles  of  equity,  to  make  good 
the  deficit  from  some  other  source. 

Here  we  cannot  help  observing  that  the  principles  on  which  the 
committee  proceeded  in  estimating  the  public  lands  of  Texas,  as  a 
fund  wherewith  to  pay  her  public  debt,  were  very  different  from 
those  commonly  adopted  by  American  statesmen.  They  seem 
generally  to  suppose  that  the  lands  are  worth  intrinsically  $1  25 
an  acre ;  but  that,  as  they  have  cost  nothing,  or  next  to  nothing, 
they  cannot  be  too  lavish  in  giving  them  away. 

The  truth  is,  the  public  lands  of  the  United  States  have  never 
repaid  the  original  cost,  including  therein  the  sums  paid  the  Indians, 
the  cost  of  the  Indian  wars  they  have  occasioned,  the  cost  of  sur 
veys  and  management,  and  interest  on  the  whole.  The  richest 
man  in  the  world  would  have  been  ruined  if  he  had  held  our  pub 
lic  lands  as  a  commercial  speculation. 

Even  now  the  fee  simple  of  all  the  public  lands  in  the  United 
States  is  not  worth  more  than  fifty  to  one  hundred  millions,  taking 
into  consideration  the  amount  they  annually  yield  and  the  expenses 
of  management.  Yet  they  might,  if  properly  guarded,  have  proved 
a  valuable  resource  to  government,  as  a  fund  for  borrowing  on  in 
times  of  exigency.  And  Congress  has  no  more  right  to  give 
them  away  than  it  has  to  give  away  the  public  ships,  the  public 
buildings,  or  the  money  in  the  public  treasury. 


THE  FISCAL  HISTORY  OF  TEXAS.  135 


CHAPTER    XXII. 

GENERAL  VIEW  OF  THE  FISCAL  POLICY  OF  TEXAS. 

Comparison  of  powers  of  the  Continental  and  of  the  Texan  Congress — Comparative 
view  of  continental  money  and  of  Texan  promissory  notes — The  Texan  promis 
sory  notes  more  eifective  as  governmental  means,  but  yet  productive  of  great 
evil — Illusion  of  the  Texan  authorities  in  regard  to  loans  and  lands — Frequent 
changes  of  revenue  laws,  and  of  public  tenders — Evils  of  government  issues. 

SOME  time  elapsed  after  the  meeting  of  the  Convention,  before 
the  revenue  and  other  laws  of  the  United  States  were  extended 
over  Texas,  and  we  will  take  advantage  of  this  quasi  interregnum, 
to  state  some  facts,  and  make  some  reflections,  which  could  not 
before  be  introduced  without  breaking  the  thread  of  our  narrative. 

In  many  respects,  the  Texan  Congress  had  more  efficient  powers 
than  were  possessed  by  our  Congress  of  1776.  The  latter  was  a 
mere  consulting  body,  and,  in  so  far  as  raising  a  revenue  was  con 
cerned,  it  could  do  little  more  than  make  suggestions  to  the  States, 
which  suggestions  the  States  might  attend  to,  or  not,  as  they  saw 
fit.  It  had  to  depend  on  the  action  of  the  States  to  give  currency 
to  its  continental  paper.  It  had  power  (or  assumed  power)  to 
borrow,  but  it  had  no  power  to  raise  money  to  pay  what  it  bor 
rowed,  or  even  interest  on  the  same.  The  Texan  Congress  united 
in  itself  all  the  powers  which  both  the  Continental  Congress  and 
our  State  revolutionary  assemblies  possessed.  It  was  sovereign 
and  supreme.  It  depended  on  no  other  political  power  to  carry 
its  measures  into  effect.  The  county,  city,  and  town  governments 
were  of  its  own  creation,  and  directly  subordinate  to  it.  There 
were  great  advantages,  in  a  fiscal  point  of  view,  in  this  unity  of 
power. 

The  coincidences  in  the  history  of  our  own  revolutionary  paper 
currency  and  that  of  Texas  are  many  and  striking,  but  the  points 
in  which  they  differed  are  not  unworthy  of  notice. 

1.  Our  revolutionary  paper-money  emanated  from  various  sources. 
In  addition  to  the  issues  of  the  Continental  Congress,  we  had 


136  THE  FISCAL  HISTORY  OF  TEXAS. 

those  of  all,  or  nearly  all,  the  thirteen  State  governments.  The 
relative  value  of  these  was  always  changing,  giving  occasion  for 
great  speculation,  and  causing  great  confusion  in  exchanges.  The 
Texan  paper-money,  though  various  in  form,  all  emanated  from 
one  source  ;  and  thus  had  a  uniformity  which  our  revolutionary 
paper-money  did  not  possess. 

2.  The  continental  issues  amounted,  in  all,  to  about  three  hun 
dred   and  fifty-seven  millions..     According  to   the  Hon.   Samuel 
Breck,  of  Philadelphia,  the  burden  this  imposed  on  the  people, 
and,  consequently,  the  advantage  the  Congress  derived  therefrom, 
was  equal  to  about  fifteen  millions  in  specie.*     This  is  at  the  rate 
of  a  little  more  than  four  and  a  half  cents  in  the  dollar.     The 
treasury  notes  of  Texas  never,  according  to  the  report   of  the 
auditor    and   comptroller,    netted  less    to    the  government   than 
twelve  and  a  half  cents  in  the  dollar.     For  the  whole  of  the  first 
issues,  or  "  printed  notes,"  par  was   received.     From  the   com 
mencement  to  the  close,  the  government  received,  for  all  its  securi 
ties,  on  an  average,  fifty  cents  in  the  dollar.     Thus,  the  revolu 
tionary  government  of  Texas  did  much  better  with  its  paper-money 
than  did  our  Continental  Congress. 

3.  An  effort  was  made  to  support  the  credit  of  our  continental 
currency  by  acts  of  compulsion.    When  it  was  but  five  months  old, 
on  the  llth  of  January,  1776,   Congress,  says  an   eye-witness, 
resolved — 

"  That  whosoever  should  refuse  to  receive  in  payment  continental  bills 
should  be  declared  and  treated  as  an  enemy  of  the  country,  and  be  pre 
cluded  from  intercourse  with  its  inhabitants,  i.  e.  outlawed.  This  ruinous 
principle  was  continued  in  practice  for  five  successive  years,  and  appeared 
in  all  shapes  and  forms,  i.  e.  in  tender-acts,  in  limitations  of  prices,  in  awful 
and  threatening  declarations,  in  penal  laws,  with  dreadful  and  ruinous  pun 
ishments,  and  in  every  other  way  that  could  be  devised,  and  all  executed 
by  a  relentless  severity  by  the  highest  authorities  then  in  being,  viz.,  by 
Congress,  by  assemblies,  and  conventions  of  the  States,  and  by  committees 
of  inspection,  whose  powers  in  those  days  were  nearly  sovereign,  and  even 
by  military  force." 
t 

Honor  to  whom  honor  is  due.     The  Texans  resorted  to  no  such 

means  to  sustain  their  paper-money.  It  never  was  made  a  legal 
tender  for  debts  due  to  individuals.  An  act  was,  indeed,  passed 
to  require  the  officers  of  government  to  receive  their  fees  in  this 

*  See  an  article  on  this  subject,  by  this  gentleman,  in  Fisher's  National  Magazine 
for  June,  1845.  As  Mr.  Breck  thinks  there  was  sound  policy  in  making  these 
issues,  he  could  have  had  no  disposition  to  underrate  the  advantages  thence  derived. 


THE  FISCAL  HISTORY  OF  TEXAS.  137 

paper-money ;  but,  if  they  thought  this  a  hardship,  they  were  at 
liberty  to  resign.  Fond  as  a  portion  of  the  Texans,  unfortunately, 
are,  or  at  least  were,  of  Lynch  law,  they  never  resorted  to  this 
summary  mode  of  proceeding  to  force  any  man  to  receive  their 
government  paper  for  more  than  it  was  worth.  The  result  was 
that,  when  "  red  backs"  were  almost  the  exclusive  circulating  me 
dium,  specie  was  the  standard  of  ultimate  reference.  If  a  man 
bought  an  article  on  credit,  for,  say  one  hundred  dollars,  he  gave 
a  note  promising  to  pay  one  hundred  dollars  in  silver,  or  so  many 
treasury  notes  as  should,  when  the  note  fell  due,  be  worth  one 
hundred  dollars  in  silver. 

From  the  superior  moderation  and  the  superior  wisdom  the 
Texan  Congress  and  the  Texan  people  herein  displayed  over  their 
revolutionary  grandsires  of  1776,  the  reader  will,  perhaps,  indulge 
the  hope  that  the  race  is  improving — that  the  hereditary  taint,  of 
which  we  have  elsewhere  spoken,  is  becoming  weaker.  We  shall 
be  happy  if  future  events  prove  this  hope  to  be  well  founded. 

4.  Texas  treasury  notes  ceased  to  be  a  circulating  medium  after 
they  sunk  to  eight  for  one,  that  is,  after  eight  dollars  in  paper 
were  worth  but  one  in  silver.     "  The  depreciation  of  continental 
money,"  says  an  author,  whom  we  have  already  quoted,  "never 
stopped  the  circulation  of  it." 

"As  long  as  it  retained  any  value,  it  passed  quick  enough;  and  would 
purchase  hard-money,  or  anything  else,  as  readily  as  ever,  when  the  exchange 
was  two  hundred  for  one,  and  when  every  hope,  or  even  idea  of  its  being 
ultimately  redeemed  at  its  nominal  value,  had  entirely  vanished." 

In  another  place,  he  remarks:  "  Its  circulation  was  never  more 
brisk  than  when  it  was  five  hundred  for  one." 

5.  The  losses  sustained  by  the  successive  depreciation  and  ulti 
mate  non-redemption  of  continental  money  fell  exclusively  on  the 
people  of  the  old  thirteen  States.     It  never  was  exported.     Great 
part  of  the  treasury  notes  of  Texas  were  sent  to  the  United  States, 
and  much  of  the  loss  sustained  by  their  successive  depreciation 
had  to  be  borne  by  people  not  immediately  interested  in  this  revo 
lutionary  struggle.     The  great  surplus  of  imports  over  exports,  in 
some  years  of  Texan  history,  cannot  be  accounted  for,  except  on 
the  supposition   that    Texan    securities   were    exchanged   in    the 
United   States  for  arms,  provisions,  and   other  necessaries.     In 
this  way  supplies  were  obtained  which  were  essential  to  the  sue- 


138  THE  FISCAL  HISTORY  OF  TEXAS. 

cess  of  the  Texan  revolution.  As  a  fiscal  machine,  government 
paper-money  yielded  more  aid  to  the  Texan  than  to  our  Conti 
nental  Congress.  By  its  means,  the  Continental  Congress  made 
levies  on  the  American  people  alone ;  while,  by  similar  means,  the 
Texan  Congress  made  levies  on  the  people  of  what  was  then  a 
foreign  country. 

Still,  it  is  matter  of  regret  that  these  issues  were  ever  made. 
With  how  little  expense  the  whole  revolutionary  struggle  might 
otherwise  have  been  conducted,  is  proved  by  the  small  cost  of 
achieving  Texan  independence,  and  the  small  cost  with  which  it 
was  sustained  during  the  three  years  of  General  Houston's  last 
presidential  term.  We  pretend  not  to  say  that  a  people,  situated 
as  the  Texans  were,  could  have  carried  through  the  conflict  with 
out  running  into  debt.  All  that  could  be  expected  in  the  way  of 
taxation,  from  so  small  a  community,  was  revenue  enough  to  defray 
the  expenses  of  their  civil  establishment,  and  that  placed  on  the 
most  economic  scale.  To  carry  on  such  hostile  operations  as  were 
indispensable,  it  was  necessary  to  borrow  in  some  form  or  other. 
But  the  Texans  selected  the  very  worst  mode  of  borrowing.  From 
the  very  beginning  their  debt  took  a  wrong  form. 

They  began  by  issuing  drafts  on  the  treasury.  This  would  all 
have  been  well  if  there  had  been  any  money  in  the  treasury. 
But,  as  there  was  none,  these  drafts,  on  the  principles  of  common 
law  and  of  common  sense,  became  "  set-offs"  against  sums  due  to 
the  treasury ;  and,  as  they  greatly  exceeded  in  amount  the  sums 
due  for  customs  and  other  taxes,  they  prevented  the  government 
from  realizing  even  so  much  efficient  revenue  as  was  necessary  to 
defray  the  expenses  of  the  civil  establishment. 

These  drafts  sunk  in  value  to  fifteen  cents  in  the  dollar.  Then 
recourse  was  had  to  the  issue  of  treasury  notes.  But  as  these, 
like  the  treasury  drafts,  were  receivable  for  customs  and  other 
taxes,  they  became,  like  them,  "  set-offs"  against  the  amounts  due 
the  treasury. 

The  result  was  that  the  Texan  Government  had  no  efficient 
revenue,  or  none  worth  speaking  of.  All  it  did,  by  all  its  appara 
tus  of  custom-house  officers  and  tax-gatherers,  was  to  redeem  part 
of  its  outstanding  liabilities.  .This  would  have  been  very  well  if 
borrowing  from  day  to  day,  or  from  month  to  month,  could  have 
met  all  fiscal  exigencies ;  but  in  time  of  war  governments  require 


THE  FISCAL  HISTORY  OF  TEXAS.  139 

something  more  than  merely  temporary  loans  to  carry  on  opera 
tions. 

All  that  could  reasonably  have  been  expected  from  a  govern 
ment,  under  such  circumstances  as  was  that  of  Texas,  was  a  fair 
settlement  with  its  creditors  for  supplies  furnished  and  services 
rendered,  and  giving  them  evidences  of  the  same,  bearing  interest, 
to  be  discharged  immediately,  in  lands ;  or,  after  the  close  of  the 
war,  either  in  lands  or  in  money,  out  of  such  revenue  as  might 
then  arise.  It  was  folly  to  attempt  to  pay  during  the  war  any 
debt  that  might  be  incurred  in  its  prosecution  out  of  any  revenue 
that  could  then  be  raised. 

The  extravagance  with  which  everything  was  conducted  was 
owing  partly  to  the  facilities  of  running  in  debt  which  these 
paper  issues  afforded ;  partly  to  the  character  of  the  men  at  the 
head  of  affairs,  who  knew  nothing  about  economy  in  either  private 
life  or  public ;  and  partly  to  other  causes. 

"The  large  appropriations  and  issues  of  treasury  notes  under  President 
Lamar's  administration  were/'  says  General  Hunt,  "  made  in  anticipation 
of  the  sale  of  the  five  million  of  bonds  which  were  authorized  by  one  law, 
and  the  one  million  authorized  by  another,  and  the  sanguine  assurances 
from  time  to  time  of  General  Hamilton  that  he  certainly  expected  to  suc 
ceed  in  the  sale  of  the  five  million  bonds  which  he  and  Mr.  Burnley  were 
empowered  to  sell." 

These  sanguine  expectations  were  common  among  the  Texans, 
but  on  what  ground  they  rested  it  is  difficult  to  imagine.  A 
government's  ability  to  pay  interest  is  the  measure  of  its  ability 
to  borrow ;  and  its  ability  to  pay  interest  is  determined  by  the 
amount  in  which  its  ordinary  revenue  exceeds  its  ordinary  ex 
penses.  The  revenue  of  Texas  fell  far  below  what  was  necessary 
for  the  support  of  even  its  civil  establishment.  To  be  sure,  it  had 
lands,  and  a  prospective  ability  to  pay,  after  peace  should  be  made 
with  Mexico  ;  but  the  experience  of  British  capitalists  in  the  Greek, 
the  Chilian,  the  Peruvian,  the  Mexican,  and  other  foreign  loans, 
had  taught  them  that  it  was  not  safe  to  rely  on  the  prospective 
ability  of  revolutionary  governments.  The  American  Congress  of 
1776  effected  no  loans  abroad  from  private  capitalists,  or  none  but 
such  as  were  guaranteed  by  the  governments  of  France,  Spain, 
or  Holland,  and  even  then  to  the  amount  of  only  $7,000,000  or 
$8,000,000.  If  General  Hamilton  had  at  any  time  a  prospect  of 
success,  it  was  not  because  the  moneyed  men  of  Europe  regarded 


140  THE  FISCAL  HISTORY  OF  TEXAS. 

as  adequate  such  security  as  Texas  could  offer,  but  because  the 
French  Government  was  disposed  to  add  thereto  its  guarantee,  in 
prosecution  of  its  design  of  establishing  close  commercial  and 
political  connection  with  the  rising  Republic. 

The  Texan  Government  effected,  in  a  direct  way,  loans  abroad 
amounting  in  all  to  less  than  five  hundred  thousand  dollars,  viz. : 
the  Triplet  loan  of  $20,070,  negotiated  at  New  Orleans  January 
11,  1836;  the  Erwin  loan  of  $45,820,  negotiated  in  the  same  city 
and  in  the  same  year,  January  16 ;  some  money  lent  by  Samuel 
Swartwout,  and  others,  amounting  in  all  to  $7,970  43 ;  and  the 
loan  obtained  from  the  United  States  Bank,  the  par  value  of  which 
is  set  down  by  the  comptroller  at  $400,000.  Instead  of  wondering 
that  the  amount  was  so  small,  we  should  wonder  that  it  was  so  large. 
That  the  United  States  Bank  lent  so  much,  was  not  owing  to  its 
riches,  but  to  its  poverty.  It  was  at  that  time  living  by  expedients, 
and  one  of  the  chief  of  these  was  getting  possession  of  State  and 
corporation  stocks,  and  pledging  them  in  Europe.  The  loan  to 
Texas  was  intended  to  aid  General  Hamilton's  operation  in  Europe., 
by  showing  that  the  rising  Republic  had  some  credit  in  America, 
with  an  ultimate  view  of  establishing,  out  of  the  five  or  seven  million 
dollars  to  be  obtained  from  France,  a  national  bank  in  Texas, 
which,  under  Mr.  Jaudon's  management,  should  act  as  a  tender  to 
the  Pennsylvania  Bank  of  the  United  States.  The  scheme  was 
well  contrived ;  but  the  fates  determined  it  should  not  succeed. 
And  yet  Texas  reaped  the  benefit  of  it  in  a  loan  of  four  hundred 
thousand  dollars,  which  she  could  not  otherwise  have  obtained. 

Another  illusion  under  which  the  Texans  labored  was  as  to  the 
efficiency  of  their  public  lands  as  a  means  of  supporting  public  credit 
and  paying  public  debts.  In  a  political  point  of  view,  wild  lands 
are  of  great  importance.  If  England  and  France  had  at  their  doors 
as  extensive  territories  as  have  the  United  States,  England  and 
France  would  be  prosperous  and  happy  in  spite  of  their  monarchical 
institutions,  their  nobility  systems,  their  church  establishments,  their 
large  armies,  their  expensive  navies,  their  heavy  public  debts,  and 
all  the  accumulated  corruptions  of  ages.  In  a  politico-economic 
point  of  view,  also,  is  land  of  great  importance.  It  is  an  essential 
element  of  all  wealth.  Even  if  a  man's  business  is  polishing  dia 
monds,  he  must  have  land,  at  least  enough  to  stand  upon.  But  in 
a  commercial  point  of  view,  land  is  of  little  or  no  value,  unless  labor 


THE  FISCAL  HISTORY  OF  TEXAS.  141 

has  been  bestowed  upon  it  or  near  it.  The  experience  of  the  United 
States  had  shown  that,  even  with  the  influx  of  emigrants  from 
Europe,  from  two  to  three  million  acres  per  year  of  the  public  lands 
were  all  that  was  required  on  an  average  for  purposes  of  cultiva 
tion.  The  amount  of  sales  never  exceeded  this  except  when,  in 
periods  of  bank  inflation,  speculation  was  directed  to  the  public 
domain. 

The  Texan  Government  bestowed  its  lands  with  so  much  profu 
sion  on  soldiers  and  settlers  as  to  supply  all  demands,  not  only  for 
cultivation  but  for  speculation,  for  many  years  to  come.  It  was, 
therefore,  unreasonable  in  the  Texan  Government  to  regard  its  public 
lands  as  immediate  means  of  great  revenue,  or  as  likely  to  afford 
much  aid  in  supporting  public  credit.  Yet,  such  was  the  infatua 
tion  on  this  subject,  that  we  find  even  Samuel  Houston,  two  years 
after  the  war  commenced,  speaking  of  the  opening  of  the  land- 
offices  as  almost  certain  to  produce  "  boundless  revenue  to  the 
Republic." 

From  this  source,  as  well  as  from  foreign  loans,  the  Texans,  after 
all,  derived  more  aid  than  they  had  any  right  to  expect.  The 
sales  of  land  were  small,  and  the  fees  paid  into  the  land-offices 
were  small.  But  the  Triplet  and  the  Erwin  loans  were  both  repaid 
with  lands ;  and  the  much-abused  agencies  at  Mobile  and  New 
Orleans,  if  they  did  nothing  else,  helped  to  sustain  the  credit  of 
Texan  paper  by  redeeming  treasury  notes  with  land-script. 

One  characteristic  of  the  revolutionary  legislation  of  Texas  was 
frequent  changes  in  its  revenue  system.  One  scheme  failing,  an 
other  was  tried.  But  even  before  opportunity  was  afforded  to  try 
some  of  the  schemes,  others  were  substituted.  In  some  instances, 
a  customs  act  had  hardly  time  to  reach  the  more  distant  sea 
ports,  before  it  would  be  made  to  give  place  to  another.  In  the 
ten  years  Texas  existed  as  an  independent  Republic,  it  had  no 
less  than  seven  distinct  tariffs. 

Almost  as  many  changes  were  made  in  their  plans  of  internal 
revenue;  and  the  statesmen  of  Texas  seem  to  have  wondered 
that  they  all  produced  nothing,  or  next  to  nothing.  But  they 
ought  not  to  have  wondered.  The  most  experienced  financier 
would  have  found  it  difficult  to  collect  a  revenue  of  any  amount 
from  a  community  so  small  as  the  Texans,  scattered  over  a  large 
territory  of  one  to  every  three  or  four  square  miles,  and  whose 


142  THE  FISCAL  HISTORY  OF  TEXAS. 

industry  was  liable  to  frequent  interruptions  from  alarms  of  incur 
sions  by  the  Mexicans  and  the  Indians.  Even  to  assess  taxes,  in 
such  a  community,  was  an  undertaking  of  no  small  difficulty. 
Much  more  difficult  was  it  to  collect  them.  Even  in  some  cases 
where  the  taxes  were  assessed,  it  was  found  necessary  to  remit 
the  payment  of  them,  in  whole  counties,  owing  to  what  they  had 
suifered  from  incursions  of  the  enemy. 

In  most  countries  of  Europe  and  in  the  United  States,  the  col 
lection  of  taxes  goes  on  with  the  regularity  of  clock-work;  but 
this  is  the  result  of  long  years  of  laborious  preparation.  When 
the  Governments  of  Pennsylvania  and  of  Maryland  were  com 
pelled,  owing  to  the  breaking  of  the  banks,  to  suspend  the  pay 
ment  of  interest  on  their  public  debts,  or  pay  only  in  inconvertible 
paper,  they  found  that  new  systems  of  internal  revenue  were  neces 
sary.  But  several  years  elapsed  before  they  could  bring  their 
new  systems  into  successful  operation,  and  thus  re-establish  their 
credit. 

Another  marked  feature  in  Texas  revolutionary  legislation  was 
frequent  changes  of  the  public  tender.  "Your  father  hath  de 
ceived  me,  and  hath  changed  my  wages  ten  times,"  said  Jacob  to 
the  sons  of  Laban.  An  equally  strong  complaint  might  have  been 
made  by  those  who  had  dealings  with  the  Texan  Government. 
These  changes  were  so  numerous  that  we  cannot  introduce  them 
into  the  text,  and  must  refer  the  reader  to  the  synopsis  of  them  in 
Appendix  M. 

All  these  changes  of  tender,  changes  in  revenue  laws,  and  all 
the  other  particulars  that  have  been  pointed  out  in  the  fiscal  sys 
tem  of  Texas,  were,  it  may  be  said,  necessary,  as  growing  out  of 
the  state  of  the  times,  the  people,  and  the  country.  In  one  sense 
of  the  word,  whatever  occurs  is  necessary,  that  is,  it  is  the  neces 
sary  effect  of  some  pre-existing  cause.  Whenever  there  is  vice  or 
ignorance,  there  will  be  folly.  The  last  is  the  necessary  conse 
quence  of  the  two  first.  We  pretend  not  to  say  that  other  men 
would  have  done  better  than  did  those  who  had  the  control  of 
affairs  in  Texas.  Nine  men  in  ten  would  perhaps  have  done  quite 
as  bad,  and  some  worse.  But  what  we  affirm  is  that,  under  a 
sound  financial  system  (supposing  it  possible  to  have  adopted  it), 
Texas  might  have  come  out  of  the  contest  with  only  one-twelfth 
part  of  the  debt  she  is  now  under  a  moral  obligation  to  discharge. 


THE  FISCAL  HISTORY  OF  TEXAS.  143 

If  such  a  system  had  been  adopted,  there  would  have  been  eco 
nomy  in  everything.  No  debts  would  then  have  been  incurred 
except  for  services  and  supplies  indispensably  necessary ;  for  then, 
only  in  cases  where  they  were  indispensably  necessary,  would  the 
people  of  Texas  have  furnished  the  required  supplies  and  services. 
There  would  not  then  have  been  one  officer  for  every  ordinary  sea 
man  in  the  Texan  navy,  and  one  officer  for  every  soldier  in  the 
Texan  army.  The  wild-goose  expedition  to  Santa  Fe  would  never 
have  been  undertaken,  and  that  to  Meir  would  have  perished  in 
the  brains  of  its  projector.  A  conciliatory  policy  towards  the 
Indians  would  have  been  adopted,  and  they  would  have  been  made 
friends  instead  of  enemies.  Let  the  people  be  made  to  feel  imme 
diately  but  a  part  of  the  burden  which  public  expenditure  imposes, 
and  that  expenditure  will  be  brought  within  moderate  limits.  But 
let  the  weight  of  this  burden  be  postponed,  or  let  its  nature  be  con 
cealed  from  them  by  the  issue  of  paper  intended  to  pass  as  money, 
and  there  will  be  no  limit  to  the  folly  and  extravagance  of  their 
rulers,  except  such  as  is  imposed  by  the  depreciation  of  the  paper. 

Issues  of  paper  intended  to  pass  as  money,  and  to  which  cur 
rency  is  given  by  making  them  receivable  for  public  dues,  afford 
so  easy  a  way  of  relieving  immediate  embarrassments,  that  ma 
nagers  of  fiscal  concerns  are  under  frequent  temptations  to  resort 
to  them.  But  such  temporary  relief  must,  unless  circumstances 
are  peculiar,  increase  subsequent  embarrassments. 

When  a  government  issues  small  notes ,  intended  to  pass  as 
money,  and  makes  them  receivable  for  public  dues,  it  takes  the  last 
step  downwards  in  public  credit.  It  has  then  no  efficient  revenue. 
All  it  then  does  by  means  of  its  collectors  of  customs,  and  its  col 
lectors  of  taxes,  is  to  redeem  part  of  its  floating  debt ;  and  this 
very  act  of  redemption  renders  necessary  the  creation  of  a  new 
floating  debt  of  equal  amount  with  that  redeemed. 

Such  a  government  can  no  longer  negotiate  a  stock  loan  with 
advantage,  for  it  has  no  longer  a  revenue  in  specie  wherewith  to 
pay  the  interest. 

.  Nations  who  wish  to  borrow  may  learn  wisdom  from  the  British 
Government.  It  has  run  in  debt  to  the  amount  of  four  thousand 
million  dollars.  It  borrows  on  exchequer  bills,  or  treasury  notes, 
as  well  as  stocks ;  but  it  always  takes  care  that  its  exchequer  bills 
shall  be  for  considerable  amounts,  and  that  they  shall  bear  such  a 


144  THE  FISCAL  HISTORY  OF  TEXAS. 

• 

rate  of  interest  as  will  leave  no  inducement  to  the  merchants  to 
pay  them  in  for  duties.  It  always  has  a  revenue  in  something 
distinct  from  its  own  paper,  and  thus  has  the  means  of  supporting 
its  credit. 

The  only  safe  mode  for  the  United  States  Government  to  bor 
row  is  by  means  of  stock  loans  of  gold  and  silver,  and  treasury 
notes  of  such  denominations  (never  less  than  fifty  dollars)  as  will 
prevent  their  becoming  a  common  circulating  medium,  and  bearing 
such  a  rate  of  interest  as  will  make  them  eligible  investments.  If 
these  treasury  notes  are,  in  the  aggregate,  of  any  large  amount, 
provision  should  be  made  to  exchange  them  for  stocks  of  long  date, 
rather  than  attempt  to  redeem  them  by  receiving  them  in  payment 
of  customs  and  other  dues. 

For  want  of  strict  attention  to  these  principles,  the  United  States 
Government  was,  in  the  war  with  Mexico,  though  that  lasted  but 
a  short  time,  and  though  it  pressed  but  lightly  on  the  real  resources 
of  the  country,  brought  into  temporary  though  not  serious  embar 
rassment.  Owing  to  a  rise  in  the  rate  of  commercial  interest,  the 
merchants  found  it  to  their  advantage  to  pay  in  treasury  notes, 
rather  than  gold  or  silver.  The  result  was  that,  in  some  of  the 
most  important  treasury  offices,  the  amount  of  gold  and  silver  was 
so  reduced  as  but  slightly  to  exceed  the  outstanding  drafts  against 
them.  It  was  with  difficulty  that  the  daily  expenditures  were  kept 
down  to  a  level  with  the  daily  receipts.  At  one  time  there  was 
even  a  talk  of  paying  the  salaries  of  the  clerks  in  the  departments 
with  treasury  notes.  Fortunately,  this  state  of  things  was  but  of 
short  continuance.  If  it  had  lasted  any  time,  it  would  have  inju 
riously  affected  the  price  of  United  States  securities  in  the  market, 
and  would  have  had  an  equally  injurious  effect  on  the  negotiation 
of  permanent  loans,  had  any  at  that  time  been  necessary. 

The  British  Government  seldom  has  afloat  less  than  seventy-five 
million  dollars  in  exchequer  bills,  and  the  amount  frequently  rises 
to  one  hundred  and  fifty  millions ;  but  when  it  finds  the  rate  of 
commercial  interest  rising,  it  raises  the  rate  of  interest  on  its  ex 
chequer  bills.  It  thus  prevents  their  being  paid  in  for  public  dues, 
and  thus  escapes  those  embarrassments  to  which  the  United  States 
Government  has  from  time  to  time  been  subject. 


THE  FISCAL  HISTORY  OF  TEXAS.  145 


CHAPTER    XXIII. 

PROCEEDINGS  UNDER  THE  FIRST  LEGISLATURE  OF  THE  STATE  OF 
TEXAS:  1845-46. 

Improved  condition  of  fiscal  affairs — State  constitution  adopted — Government  of 
the  State  ad  interim — Immediate  benefits  of  annexation — First  meeting  of  the 
Legislature — Reports  to  the  House  and  Senate  in  favor  of  ceding  the  public  lands 
to  the  United  States,  as  a  means  of  paying  the  public  debt — Scaling  of  the  debt 
recommended — Its  injustice — Instances  in  which  the  Governments  of  England  and 
the  United  States  have  engaged  to  pay  more  than  they  received — Texas  borrowed 
on  good  terms,  all  circumstances  considered — Men  who  have  bought  Texan 
securities  might  have  done  better  by  other  investments. 

BY  the  time  annexation  was  effected,  Texas  may,  in  one  sense, 
be  said  to  have  worked  through  her  pecuniary  difficulties.  She 
had,  indeed,  a  heavy  public  debt  hanging  over  her ;  but,  as  she  had 
for  the  three  preceding  years  given  over  all  attempts  to  pay  either 
principal  or  interest,  it  caused  her  no  immediate  perplexity. 

For  the  three  years  ending  September  30,  1844,  her  expendi 
tures  were  $511,083,  equal  to  $170,361  a  year.  The  amount  was 
small;  but,  small  as  it  was,  it  exceeded  the  aggregate  of  the  receipts, 
in  these  three  years,  in  the  sum  of  $44,398  58. 

In  the  fourteen  months  intervening  between  November  1, 1844, 
and  January  1,  1846,  her  receipts  amounted  to  $321,432  43,  and 
then,  for  the  first  time  in  her  history,  did  the  revenue  of  Texas  exceed 
her  expenditure.  The  surplus  was,  indeed,  not  large,  but  any  sur 
plus  was  remarkable. 

That  she  had  such  surplus  was  owing  to  her  retaining  the  cus 
tom-house  revenues  till  October  1,  1845,  or  for  three  months  after 
her  Convention  had  accepted  the  terms  of  annexation  offered  by 
the  United  States. 

This  Convention,  as  has  been  stated  in  a  previous  chapter, 
assented,  on  the  4th  of  July,  1845,  to  the  term  of  annexation. 
They  also  adopted  a  constitution  for  the  State  of  Texas,  which 
was  submitted  to  and  approved  by  the  people  on  the  second  Mon 
day  in  October,  1845.  But  the  new  State  Government  did  not 
10 


146  THE  FISCAL  HISTORY  OF  TEXAS. 

fairly  commence  till  February,  1846,  when  the  first  Legislature 
assembled. 

There  was  thus,  for  several  months,  a  kind  of  government  ad 
interim,  and  this  was  favorable  to  Texas,  as,  though  protected  in 
that  time  by  the  United  States  forces,  she  still  derived  a  revenue 
from  her  import  duties.  This  advantage  did  not  cease  with  the 
year,  as  the  arrears  of  the  customs  yielded  her  a  net  revenue  of 
fifty-one  thousand  two  hundred  and  six  dollars  and  thirteen  cents, 
between  the  19th  of  February,  1846,  and  the  31st  of  December, 
1847,  and  some  small  sums  in  subsequent  years.  The  precise 
time  when  the  United  States  Customs  acts  took  effect  in  Texas 
is  yet  to  be  decided  by  the  United  States  courts. 

The  benefits  of  annexation  were  felt  immediately  in  increased 
immigration,  and  in  the  expenditures  made  by  the  United  States 
Government  for  purposes  of  defence.  The  war  with  Mexico  was, 
in  a  pecuniary  point  of  view,  of  great  advantage  to  Texas.  Her 
citizens  could  not,  indeed,  supply  any  large  amount  of  provisions 
to  the  army  or  the  navy,  but  the  transportation  of  troops  and 
stores  was  to  them  great  gain. 

The  first  Legislature  met  at  Austin  February  16,  1846,  and  the 
subject  of  the  public  debt  early  engaged  its  attention.  A  report 
by  a  select  committee  appears  to  have  been  made  March  1,  though 
it  was  not  read  till  April  1.  A  part  of  this  we  shall  extract: — 

"  The  committee  to  whom  was  referred  the  resolution  of  the  House  to 
inquire  into  the  expediency  of  ceding  the  public  lands  to  the  United  States, 
for  a  just  equivalent,  for  the  purpose  of  providing  means  for  the  discharge 
of  the  public  debt,  and  to  inquire  into  the  propriety  of  classifying  and 
defining  the  debt,  and  of  organizing  a  board  to  ascertain  and  adjudicate 
upon  the  same,  having  considered  each  proposition,  present  the  following 
report : — 

rtlt  is  now  more  than  ten  years  since  Texas  achieved  and  established  her 
independence  by  a  successful  revolution.  When  she  was  driven  into  that 
revolution  by  the  oppression  of  the  Mexican  Government,  her  population 
was  extremely  small,  scattered  over  a  widely  extended  territory,  with  little 
wealth,  few  sources  of  taxation,  and,  as  a  consequence,  but  ill  able  to  pro 
cure  the  means  to  support  a  government,  and  sustain  the  military  operations 
which  the  defence  of  the  country  demanded.  The  military  service  of  the 
country  diverting  so  large  a  proportion  of  the  population  from  the  industrial 
avocations  of  life,  rendered  it  impossible  for  the  government  to  draw  any 
adequate  revenues  from  its  own  population.  In  this  state  of  things,  many 
of  the  ardent  friends  of  Texan  independence,  at  home  and  abroad,  stepped 
forward  and  advanced  their  money  for  the  relief  of  the  urgent  wants  of  the 
country,  at  a  time  when  doubt  hung  over  the  result  of  the  contest. 


THE  FISCAL  HISTORY  OF  TEXAS.  147 

"Texas  came  triumphantly  out  of  the  struggle,  with  less  loss  of  blood 
and  treasure  than  has  ever  attended  a  revolution  of  as  much  magnitude  in 
the  annals  of  history;  but  yet  it  has  entailed  upon  her  a  considerable  debt, 
which  is  strongly  recommended  to  our  sense  of  justice  and  honor  for  the 
earliest  practicable  payment.  Your  committee  are  confident  the  people  of 
Texas  feel  keenly  the  weight  of  this  obligation,  and  are  anxious  to  meet  it, 
although  most  revolutionary  governments  have  been  singularly  disregardful 
of  debts  contracted  under  similar  circumstances.  Unfortunately,  how 
ever,  for  Texas,  owing  to  the  peculiar  condition  of  her  past  public  affairs, 
her  population  has  not  increased  with  the  rapidity  which  might  have  been 
anticipated  from  the  salubrity  of  her  climate  and  the  fertility  of  her  soil. 
Her  resources  and  ability  for  raising  revenue  from  direct  taxation  cannot, 
for  many  years  to  come,  exceed  the  urgent  and  indispensable  wants  of  her 
domestic  administration.  Nor  can  it  be  denied  that  annexation,  however 
important  and  advantageous  to  this  country  in  other  respects,  has,  by  de 
stroying  the  revenue  arising  from  the  customs,  taken  from  us  a  growing 
source  of  revenue,  which  might,  in  a  short  time,  have  afforded  efficient  means 
of  providing  for  the  public  creditors.  However  strong,  therefore,  may  be 
the  desire  of  the  country  to  provide  for  its  creditors,  it  has  no  ability  of 
doing  so  except  through  the  means  of  the  public  lands.  They  can  be  made 
available  for  that  purpose  only  by  ceding  them  to  the  Government  of  the 
United  States,  in  such  a  manner  as  to  realize  the  money,  or  cash  securities, 
or  by  making  them  the  bases  of  land-script,  to  be  located  and  surveyed  by 
the  public  creditor  at  his  own  expense.  For  many  reasons,  the  committee 
think  the  former  course  will  prove  the  most  advantageous  both  for  the  Go 
vernment  of  the  United  States  and  the  people  of  Texas." 

The  committee  then  state  that  Texas  has  not  even  the  means  of 
surveying  these  lands,  the  cost  of  which  would  be  $500,000,  and 
give  a  variety  of  reasons,  political  and  pecuniary,  to  show  that  it 
would  be  to  the  advantage  of  the  Federal  Government  to  purchase 
them.  But  if  the  United  States  should  not  purchase  them,  they 
recommend  that  the  public  creditors 

"  Should  be  called  upon  to  exchange  their  securities  and  evidences  of 
debt  for  land-script,  as  the  only  means  which  the  State  would  have  to  pay 
her  public  debt.  And  although  such  a  measure  would  fall  far  short  of  the 
wish  of  Texas  to  protect  her  creditors,  and  would  doubtless  occasion  much 
injustice  and  suffering  in  many  instances,  yet  she  would  appeal  to  the  civil 
ized  world,  that  she  had  performed  all  in  her  power  to  redeem  her  public 
engagements,  and  maintain  her  national  faith." 

***>K**^* 

"Texas  does  not  ask  the  United  States  to  assume  her  public  debt.  She 
proposes,  it  is  true,  with  the  proceeds  of  such  sale,  honestly  and  faithfully 
to  pay  the  debt,  and  pledges  herself  to  that  effect;  but  the  two  propositions 
are  independent  and  distinct.  Over  the  last,  neither  the  agency  nor  control 
of  the  United  States  is  invoked.  Texas  will  determine  what  her  debt  is, 
and  to  whom  it  is  due,  and  the  proceeds  of  the  land  with  which  she  pays 
it  is  the  property  of  Texas,  and  not  of  the  United  States,  and  must  pass  to 
the  treasury  of  the  former,  if  no  creditor  should  appear.'.' 


148  THE  FISCAL  HISTORY  OF  TEXAS. 

Thus  far,  no  sentiment  was  uttered  but  such  as  must  be  approved 
by  the  reader.  The  debt  was  honorably  admitted  to  be  due,  and 
every  disposition  evinced  to  pay  it,  so  far  as  it  was  possible  for 
Texas  to  accomplish  this  object  with  such  means  as  she  possessed, 
or  could  procure  by  means  of  a  sale  of  her  lands  to  the  United 
States.  But  the  residue  of  the  report  shows  that  the  public  mind 
in  Texas  had  by  this  time  become  familiarized  with  the  idea  of 
repudiation,  first  brought  forward  by  Mr.  Secretary  Chalmers, 
under  the  form  of  scaling  the  interest : — 

"2.  The  ascertainment  and  classification  of  the  public  debt.  The  fact 
that  the  debt  was  contracted  during  a  revolutionary  struggle  constitutes  no 
reason,  in  the  opinion  of  the  committee,  why  we  should  not  pay  it  in  honesty 
and  good  faith.  They,  nevertheless,  think  that  she  should  be  bound  to 
return  to  the  public  creditors  only  what,  according  to  just  average,  they 
paid  for  her  securities,  with  the  rate  of  interest  stipulated  in  the  bond,  or 
other  evidence  of  debt ;  they  have  endeavored  to  place  the  scheme  of  classi 
fication  on  the  broad  basis  of  paying  back  with  interest  to  every  man  every 
dollar  advanced  to  her  service  or  invested  in  the  faith  of  her  securities. 
They  have  made  as  near  an  approximation  to  truth  and  justice  as  so  com 
plicated  a  subject  was  susceptible  of;  but  that  there  may  occur  some  cases 
of  individual  hardship  in  carrying  out  any  method  of  classification,  they  can 
not  doubt." 

Here  it  appears  that  the  committee  proposed  that  Texas  should 
pay,  not  what  she  had  promised  to  pay,  but  what  she  had,  accord 
ing  to  their  estimate,  actually  received.  It  was  a  pity  this  was 
not  understood  at  first,  for  then  she  would  have  received  nothing. 
No  man  would  have  given  fifty  cents,  twenty,  or  even  ten  cents  in 
the  dollar  for  her  paper  if  he  had  clearly  understood  that,  after 
waiting  an  indefinite  time,  and  with  great  uncertainty,  he  should 
ultimately  receive  no  more  than  he  gave.  If  Texas  meant,  when 
she  issued  her  treasury  notes  and  other  obligations,  to  pay  no  more 
than  one-half,  one-fourth,  or  one-fifth  of  their  face  value,  she  ought 
to  have  said  so.  Then  nobody  would  have  lent  to  her. 

What  is  called  "interest"  is  made  up  of  two  distinct  items, 
"rent  or  usage,"  and  "insurance."  Just  in  proportion  as  the 
risk  of  non-payment  increases,  does  the  rate  of  insurance  rise. 
This  shows  itself,  in  the  case  of  negotiable  securities,  in  the  ratio 
which  the  price  offered  bears  to  their  face  value.  As  Texas  con 
tinued  to  issue  her  promises  to  pay,  they  fell  in  value,  because 
every  addition  she  made  to  her  outstanding  obligations  diminished 
the  chances  of  ultimate  repayment.  Hence  her  securities  fell 


THE  FISCAL  HISTORY  OF  TEXAS.  149 

from  par  to  fifty  cents  on  the  dollar,  to  thirty  cents,  to  twenty 
cents,  to  sixteen  cents. 

With  just  as  much  reason  might  a  merchant,  having  insured  a 
ship  at  sea  in  a  stormy  time,  and  on  a  dangerous  coast,  afterwards 
refuse  to  pay  the  insurance  when  the  ship  is  brought  safely  into 
port,  as  Texas  now  refuse  to  pay  the  insurance  she  engaged  to  give 
to  those  who,  in  an  "  exceedingly  dark  and  gloomy  period,"  risked 
their  all  in  her  securities. 

Admit  the  principle  which  Texas  has  adopted,  and  it  strikes  a 
blow  at  the  very  foundation  of  public  credit.  No  government 
could  then  borrow  except  under  the  most  favorable  circumstances, 
for  it  is  only  under  such  circumstances  that  governments  receive 
as  much  as  they  promise  to  give. 

The  rate  of  commercial  interest  is  sometimes  one  or  two  per 
cent,  a  month.  Then  a  certificate  of  public  stock  for  $100  is 
worth  as  an  investment  for  immediate  income  no  more  than  $25  or 
$50.  If  public  stocks  bring  more  in  such  times,  it  is  because  they 
are  regarded  as  permanent  investments  which  will  yield  a  fixed 
income  when  the  rate  of  commercial  interest  falls. 

In  addition  to  fluctuations  in  the  value  of  public  securities 
caused  by  fluctuations  in  the  rate  of  commercial  interest,  there 
are  others  caused  by  changes  in  the  prospective  necessity  of 
governments  to  borrow,  and  their  prospective  ability  to  pay  what 
they  owe.  All  these  causes  combined  cause  public  securities  to 
vary  in  price  just  as  sugar  and  coffee  vary.  They  are,  in  fact, 
merchandise  subject  to  like  laws  of  supply  and  demand  with  other 
merchandise.  If,  then,  when,  from  one  or  more  of  those  causes, 
these  securities  are  low  in  the  market,  a  government  is  under  the 
necessity  of  issuing  more,  it  must  expect  to  receive  for  them  less 
than  it  promises  to  give. 

The  histories  of  all  civilized  countries  afford  abundant  illustra 
tions  of  these  truths. 

According  to  Dr.  Hamilton,  the  author  of  An  Inquiry  into  the 
Public  Debt  of  Great  Britain,  the  British  Government,  between 
the  beginning  of  1793  and  the  close  of  1812,  issued  certificates 
to  the  amount  of  573,781,887  pounds  sterling,  for  which  it  re 
ceived  only  384,616,705  pounds.  For  every  bond  of  1000  pounds, 
it  received  only  about  670.  In  other  words,  it  issued  stock  to 
the  amount  of  about  $2,865,000,000,  and  received  in  return  the 


150  THE  FISCAL  HISTORY  OF  TEXAS. 

equivalent  of  only  $1,945,000,000.  The  difference  in  the  value 
it  received  and  that  it  promised  to  give  was  $945,000,000 — more 
than  seventy-four  times  as  much  as  the  gross  debt  of  Texas. 

For  stocks  of  the  amount  of  259,215,875  pounds  sterling 
(included  in  the  total  above  given),  it  received  only  158,658,000 
pounds,  being  at  the  rate  of  611  pounds  for  every  certificate  for 
1000  pounds. 

In  the  year  1798,  the  same  government  borrowed  15,000,000 
pounds  sterling,  for  which  it  had  to  issue  stocks  to  the  amount  of 
30,000,000.  In  other  words,  it  received  but  fifty  cents  in  the  dol 
lar  on  the  amount  of  its  certificates. 

A  still  stronger  case  than  this  occurred  in  the  year  1797,  when 
the  British  Government  negotiated  a  loan  for  which  it  had  to  issue 
226  pounds  10  shillings  in  stock  for  every  100  pounds  it  received; 
that  is,  it  got  but  forty-four  cents  and  a  fraction  for  every  dollar 
expressed  on  the  face  of  its  obligations. 

In  the  year  1813,  the  same  government  negotiated  a  loan  for 
nearly  $200,000,000,  for  which  it  got  apparently  about  fifty-six 
cents  in  the  dollar  ;  but,  as  the  whole  amount  was  received  in  bank 
paper,  then  at  a  depreciation  of  about  twenty-five  per  cent.,  "  the 
actual  par  value  which  was  realized"  was  less  than  forty-four  cents 
in  the  dollar. 

If  the  principles  adopted  by  Texas  are  correct,  the  British 
Government  would,  especially  when  we  take  into  consideration  the 
fact  that  many  of  its  loans  were  negotiated  in  depreciated  bank 
currency,  be  justifiable  in  repudiating  two-thirds  of  its  debt. 

In  the  year  1813,  the  United  States  Government  borrowed  about 
fifteen  million  dollars,  for  twelve  millions  of  which  stock  was  issued 
at  the  rate  of  one  hundred  and  twenty-five  dollars  for  every  one 
hundred  paid  in.  As  much  of  this  loan  was  received  in  depreciated 
paper,  the  Treasury  Department  did  not  realize  more  than  seven 
hundred  dollars,  perhaps  not  more  than  six  hundred  dollars,  for 
every  one  thousand  dollar  certificate. 

In  the  last  annual  report  which  Mr.  Walker  made,  as  Secretary 
of  the  Treasury,  is  the  following  passage: — 

"  By  the  report  of  the  Committee  of  Ways  and  Means,  of  the  House  of 
Representatives  of  Congress,  of  the  30th  of  April,  1830,  it  appears  that  of 
the  loans  of  the  war  of  1812,  for  eighty  millions  of  stocks  and  treasury 
notes,  the  government  obtained  but  thirty-four  inillions;  leaving  a  loss  of 
forty-six  millions  on  its  transactions." 


THE  FISCAL  HISTORY  OF  TEXAS.  151 

According  to  this  statement,  the  American  Government  realized 
but  forty-two  cents  and  a  half  in  the  dollar  on  its  bonds  and  trea 
sury  notes.  On  Texan  principles,  it  would  have  been  justifiable  in 
repudiating  more  than  one-half  of  its  debts;  but  it  acknowledged 
no  such  principles,  and  paid  to  the  uttermost  farthing  what  it 
owed. 

Agreeably  to  the  report  of  the  auditorial  board  of  Texas,  that 
republic  realized  fifty-five  cents,  less  a  fraction,  in  the  dollar,  on 
the  whole  amount  of  its  debts.  It  thus  did  much  better  than  did 
either  the  British  Government  in  the  wars  of  the  French  Revolu 
tion,  or  the  United  States  Government  in  the  war  of  1812-14. 

The  truth  is  that  Texas  did  much  better  than  she  had  any  right 
to  expect,  and  much  better  than  she  could  possibly  have  done  if 
her  creditors  had  had  the  remotest  suspicion  that  their  claims  were 
ultimately  to  be  scaled  down  on  the  arbitrary  principles  she  has 
adopted.  When  the  interest  on  public  securities  is  not  punctually 
paid,  they  always  decline  in  value.  The  British  and  the  American 
Governments  were  always  punctual  in  the  payment  of  interests ; 
but  the  Texan  Government  never  paid  a  dollar  of  interest  except 
in  the  way  of  other  promises  to  pay. 

All  the  causes  we  have  mentioned  as  depressing  the  price  of 
stocks  operated  with  combined  influence  on  Texan  securities.  The 
rate  of  commercial  interest  was  high  in  Texas,  and  also  in  the 
United  States.  The  prospective  demand  of  the  Texan  Government 
for  more  money  was  great.  Its  prospective  ability  to  pay  was 
small.  Under  these  circumstances,  he  who  gave  sixteen  cents  in 
the  dollar  for  her  securities  gave  more  than  they  were  worth,  and 
this  is  proved  by  the  fact  that  they  fell  soon  afterwards  to  ten,  five, 
and  even  two  cents  in  the  dollar. 

Other  proof  may  be  given  that  he  who  received  them  from  the 
government  at  sixteen  cents  in  the  dollar  did  not  make  a  very  pro 
fitable  investment,  even  supposing  the  notes  to  be  ultimately  paid 
in  full,  but  supposing  that  payment  deferred  for  fifteen  years. 
The  commercial  rate  of  interest  in  Texas  was  then  very  high,  not 
less  than  twelve  per  cent.  Commercial  profits  could  not  then  have 
been  less  than  twenty  per  cent.  The  gain  which  a  merchant  makes 
in  one  year  is  an  addition  to  his  capital  in  the  next.  He  thus,  if 
successful,  increases  his  wealth  in  the  ratio  of  compound  interest. 

Now,  one  hundred  dollars  invested  in  trade,  at  this  rate  of  profit, 


152  THE  FISCAL  HISTORY  OF  TEXAS. 

would,  in  fifteen  years,  amount  to  $1,719  48,  while  one  hundred 
dollars  invested  in  treasury  notes,  bearing  ten  per  cent,  interest, 
and  supposing  them  bought  at  sixteen  cents  in  the  dollar,  would, 
in  fifteen  years,  amount  to  only  $1,562  50.  But  at  the  time  we 
are  speaking  of,  the  rate  of  interest  in  Texas  was  much  nearer  two 
or  three  per  cent,  a  month  than  twelve  per  cent,  per  annum ;  and 
the  profits  of  trade  were  correspondingly  high.  Many  a  man  might, 
by  investing  his  money  in  merchandise,  have  made  as  much  in  two 
or  three  years  as  by  investing  in  treasury  notes  at  sixteen  cents 
in  the  dollar  in  fifteen  years,  even  if  these  notes  should  be  paid  in 
full. 

Many  a  man,  by  investing  his  money  in  lands  in  Texas,  might 
have  made  more  money  than  by  investing  them  in  treasury  notes. 
Lands  could  then  be  bought  in  Texas  at  ten  and  fifteen  cents  which 
have  since  sold  at  five  and  ten  dollars  per  acre.  In  this  way  a 
hundred  dollars  invested  in  lands  might  have  been  made  to  pro 
duce  from  $3,300  to  $10,000. 

Certain  it  is  that  many  men  in  the  United  States  have,  out  of 
very  small  capitals,  made  in  the  last  fifteen  years  very  large  for 
tunes.  But  whether  those  who  were  so  unfortunate  as  to  make 
investments  in  Texan  securities  would  have  lost  or  gained  by  in 
vestments  in  other  ways,  is  not  the  question.  The  question  is, 
whether  Texas  has  a  right  to  violate  her  contracts  simply  because 
she  did  not  receive  two  or  three,  or  four  or  five  times  as  much  for 
her  notes  and  bonds  as  anybody  would  then  have  given.  We  main 
tain  that  she  has  not.  Her  securities  were  sold  in  the  open  market. 
She  got  full  value  for  them.  She  got  for  them  far  more  than  any 
cautious  man  ought  to  have  been  willing  to  give.  And  she  is  bound 
to  pay  the  full  amount  she  promised  to  pay,  for  it  was  through  the 
most  solemn  promises  to  pay  the  full  amount,  and  through  them 
only,  that  she  got  what  she  actually  received. 

Instances  of  repudiation  have  occurred  both  in  Europe  and 
America ;  but  never  on  the  ground  assumed  by  Texas.  Former 
instances  of  repudiation  have  been,  because  the  debts  were  con 
tracted  in  violation  of  law  or  constitution  ;  because  gross  frauds 
were  perpetrated  in  the  negotiation  of  loans  ;  or  because  the  go 
vernment  was  not  able  to  meet  its  obligations.  But  Texas  makes 
none  of  these  pleas.  She  repudiates  simply  because  her  commodi 
ties,  her  promises  to  pay,  did  not,  when  she  oifered  them  for  sale 


THE  FISCAL  HISTORY  OF  TEXAS.  153 

in  open  market,  bring  from  two  to  five  times  as  much  as  they  were 
worth. 

On  the  24th  of  March,  a  committee  of  the  Senate  made  a  report 
in  favor  of  selling  the  public  lands  to  the  United  States.  It  was 
similar  in  tenor  to  that  read  to  the  House  : — 

"  They  deem  it  is  now  the  most  important  object  to  be  consummated  by 
the  State  of  Texas,  the  adjustment  and  payment  of  the  debt  contracted  by 
and  under  the  Government  of  the  Republic  of  Texas ;  a  measure  necessary 
for  the  redemption  of  plighted  faith,  from  which  no  people  should  feel 
themselves  relieved  by  change  of  government,  and  necessary  in  order  that 
justice  may  be  administered  to  those  holding  claims  against  the  Republic 
of  Texas  ;  many  of  whom  have  rendered  timely  and  essential  services  at  an 
important  crisis/' 

All  this  is  very  good.  But  in  what,  in  the  opinion  of  the  com 
mittee,  "  the  administration  of  justice  consisted,"  and  what  was 
necessary  for  "  the  redemption  of  plighted  faith,  from  which  no 
people  should  be  released,"  will  be  seen  in  that  which  follows : — 

"  Nevertheless,  your  committee  are  clearly  of  opinion  that  there  should 
be  a  legislative  classification  of  all  debts  against  the  Republic  of  Texas ; 
and  to  each  should  be  awarded  such  relief  and  payment  as  is  due,  according 
to  the  merits  of  each  creditor  •  for  your  committee  cannot  consent  that  the 
parties  who  have  advanced  cash  and  important  services  to  Texas  shall  be 
placed  on  equal  footing  with  those  who  hold  the  liabilities  of  the  Republic 
of  Texas,  for  which  they  have  paid  not  more  than  twenty  cents  in  the 
dollar,  and  for  which  Texas  received  perhaps  a  less  amount,  as  it  is  noto 
rious  and  universally  admitted  that  a  great  portion  of  the  liabilities  now  in 
circulation  were  issued  and  paid  out  at  about  sixteen  cents  in  the  dollar." 

The  committee  reported  u  An  act  to  Classify  the  Liabilities  of 
the  Republic  of  Texas,"  in  which  a  distinction  was  made  between 
original  holders  of  claims  and  others.  And  another,  entitled 
"  An  act  for  the  Discharge  of  the  Public  Debt  of  the  Republic  of 
Texas,"  on  the  scaling  principle  supported  by  the  House  com 
mittee. 

This  was  not  the  first  time  in  the  legislation  of  Texas  that  an 
attempt  was  made  to  draw  a  distinction  between  original  holders 
of  claims  and  those  to  whom  they  might  be  transferred.  The 
reasons  for  such  a  distinction  may,  at  first  glance,  seem  plausible, 
but  they  are,  in  reality,  contrary  to  all  the  sound  principles  of 
finance,  and  also  of  natural  justice.  The  obligation  to  pay  a  debt 
is  not  in  the  least  diminished  by  the  evidence  thereof  changing 
owners.  If  a  note  or  a  bond  issued  by  an  individual,  a  bank,  or 
a  government,  passes  through  five  hundred  hands,  not  one  cent  of 


154  THE  FISCAL  HISTORY  OF  TEXAS. 

the  amount  for  which  it  has  been  given  is  thereby  discharged. 
The  obligation  to  pay  the  full  amount  is  as  complete  when  it  is  in 
the  hands  of  the  last  holder  as  when  it  was  in  the  hands  of  the 
first. 

Negotiable  securities  owe  much  of  their  value  to  the  facility 
with  which  they  can  be  transferred.  Few  men  would  be  willing 
to  receive  treasury  notes,  if  it  should  be  made  a  condition  that 
they  should  be  receivable  for  public  dues,  or  payable  in  full  to 
those  only  to  whom  they  were  originally  issued.  Still  fewer  would 
be  willing  to  purchase  stocks  having  many  years  to  run,  if  it  were 
made  a  condition  that  a  deduction  should  be  made  from  the  annual 
interest,  and  ultimately  from  the  principal,  if  the  demand  were 
made  by  any  other  than  the  original  holder.  But  men  are  now 
willing  to  purchase  both  treasury  notes  and  stocks,  because  they 
know  that,  when  it  is  no  longer  convenient  to  hold  them  as  invest 
ments,  they  can  transfer  their  claim  to  others  at  its  full  value,  what 
ever  that  value  may  be  in  the  market. 

If  an  individual,  a  bank,  or  a  government,  does,  by  refusal  or 
delay  to  pay  interest  or  principal  as  agreed  on,  make  it  necessary 
for  the  original  or  any  other  holder  of  a  note  or  a  bond  to  dispose 
of  it  to  a  disadvantage,  he  has  a  claim,  in  equity,  for  damages 
against  the  defaulting  individual,  bank,  or  government.  On  these 
principles,  an  immense  number  of  suits  might  be  brought  against 
Texas,  if  it  were  possible  to  sue  a  sovereign  State.  But  if  all  these 
damages  should  be  paid  in  full,  that  would  not  in  the  least  diminish 
the  obligation  to  pay  the  original  debt.  Those  who  got  the  evi 
dences  at  second  or  third  hand  paid  for  them  what  was  then  their 
full  value. 

To  their  transferable  nature,  the  Texan  securities  owed  much  of 
the  little  value  they  at  times  possessed.  And  many  an  original 
claimant  derived  more  advantage  from  parting  with  them,  even  at 
less  than  he  gave  for  them,  than  he  would  have  derived  from  hold 
ing  them.  A  government  security  for  one  hundred  dollars,  bear 
ing  no  interest  (and  such  were  the  Texan  "red  backs"),  and  not 
paid  till  sixteen  years  after  date,  is,  in  a  country  where  interest  is 
at  the  rate  of  twelve  per  cent.,  worth,  money  in  hand,  but  a  frac 
tion  more  than  sixteen  cents  in  a  dollar. 

But  mere  figures  will  not  show  all  the  disadvantages  that  the 
original  claimants  under  the  Texan.  Government  would  have  sus- 


THE  FISCAL  HISTORY  OF  TEXAS.  155 

tained,  if  they  could  not  have  disposed  of  their  evidences  of  govern 
ment  debt  even,  in  some  instances,  for  much  less  than  they  cost 
them.  The  neglect  to  pay  a  single  note  when  it  is  due  may  break 
up  what  might  otherwise  be  a  long  train  of  profitable  mercantile 
operations.  The  inability  to  procure  a  few  farming  implements 
may  cause  hundreds  of  acres  to  lie  desolate  which  otherwise  might 
have  been  successfully  cultivated.  Nay,  many  of  the  original  hold 
ers  of  claims  might  have  seen  their  families  starving  before  them, 
if  they  could  not  have  disposed  of  those  claims  to  second  and  third 
parties. 

The  merchants  of  Texas  received  the  evidences  of  public  debt 
from  the  original  holders,  and  disposed  of  them  in  the  United 
States.  This  enabled  them  to  replenish  their  stock  of  goods,  and 
thus  grant  supplies  to  the  planters  and  farmers.  Through  all  the 
first  years  of  their  revolutionary  struggle,  the  Texans  were  fed  and 
clothed  by  means  of  transfers  of  the  evidences  of  the  public  debt 
from  the  hands  of  the  original  holders.  Regarded  in  this  point 
of  view,  as  a  merchant  of  Houston  once  remarked  to  us,  no  coun 
try  ever  derived  more  advantage  from  its  public  debt  than  did 
Texas. 

But,  we  repeat  it,  whether  this  advantage  was  great  or  small 
is  not  properly  the  question.  The  question  is,  whether  Texas 
shall  pay  in  full  the  debts  she  over  and  over  solemnly  promised  to 
pay — debts  which  she  never  talked  of  scaling  till  her  credit  was 
sunk  so  low  that  she  could  borrow  no  more.  We  contend  that  she 
is  morally  bound  to  pay  to  the  uttermost  farthing  what  she  con 
tracted  to  pay,  no  matter  in  whose  hands  the  evidences  of  the 
debt  are  now  found,  and  that,  if  she  will  not  pay,  she  must  share 
the  disgrace  that  properly  attaches  to  individuals,  corporations, 
and  governments  that  can  pay  their  debts,  and  will  not. 


156  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    XXIV. 

PROCEEDINGS  UNDER  THE  SECOND  LEGISLATURE:    1847-48. 

The  scaling  policy  sustained — The  fact  that  the  debt  is  due  to  persons  abroad 
urged  as  one  reason  why  it  should  not  be  paid  in  full — Act  "  to  pro  vide  for  ascer 
taining  the  debt  of  the  late  Republic  of  Texas" — Creditors  ordered  to  bring  in 
their  claims  to  be  scaled. 

THE  first  Legislature  of  the  State  of  Texas  took  the  stand  that 
a  distinction  should  be  made  between  original  holders  and  as 
signees  of  the  evidences  of  public  debt,  and  that  the  gross  amount 
should  be  scaled  down  one-half.  The  second  Legislature,  which 
assembled  at  Austin  December  13,  1847,  maintained  the  same 
stand. 

On  the  29th  of  December,  the  Governor,  George  T.  Wood,  sent 
in  a  message,  in  which  he  recommended  a  sale  of  public  land  to 
the  United  States,  and  the  payment  of  the  public  debt  by  scaling, 
as  had  been  urged  by  the  committees  of  the  previous  legislature. 

"  As  to  our  means  of  payment,  our  large  and  valuable  public  domain  is 
the  only  ready  resource  we  have. 

"  Our  debt  must  be  paid.  The  honor  of  the  State  must  stand  without 
blemish.  We  can  never  expect  to  attain  a  high  and  permanent  prosperity 
until  it  is  done;  and  the  consummation  of  a  purpose  so  noble  calls  for  united 
and  energetic  action." 

Scaling  a  debt,  however,  as  recommended  by  Governor  Wood, 
is  not  paying  it.  It  is  at  best  but  compromising  it.  Necessity 
may  induce  creditors  to  accept  terms  by  which  they  forego  one- 
half  of  their  claims ;  but  if  any  State  forces  such  a  compromise  on 
its  creditors,  "its  honor  cannot  stand  without  blemish." 

Texas,  it  may  be  admitted,  has  power,  as  a  sovereign  State,  to 
determine,  in  the  first  instance,  the  amount  of  her  debt,  and  to 
whom  it  is  due ;  but  she  has  no  moral  right  to  do  wrong.  As  there 
is  no  Supreme  Court  before  which  her  acts  can  be  brought  for 
adjudication,  her  creditors  have  no  legal  appeal  from  even  her 
most  unrighteous  decision.  In  the  exercise  of  her  sovereignty, 
she  can  repudiate  the  whole  of  her  debt  as  readily  as  one-half  of 


THE  FISCAL  HISTORY  OF  TEXAS.  157 

it.  Her  political  power  in  the  premises  is  not  disputed.  But  if 
she  thus  violates  all  the  principles  of  natural  justice  and  the  laws 
of  nations,  she  cannot  expect  her  "  honor  to  stand  without 
blemish." 

Her  creditors  will  have  a  right  to  complain,  although  their  op 
pressor  may  be  a  sovereign  State,  As  one  of  her  great  men  said, 
in  an  early  period  of  her  history,  "  Nations,  as  well  as  individuals, 
are  amenable  for  their  acts  to  the  general  opinion  of  mankind;" 
and  Texas  will  sensibly  feel  this,  if  she  persists  in  the  violation  of 
her  plighted  faith. 

January  24th,  1848,  a  special  committee  made  a  report,  in 
which  they  said: — 

"  It  is,  in  their  opinion,  impossible  to  adopt  any  rule  for  the  graduation 
of  the  liabilities  of  the  late  Republic,  without  doing  a  seeming  injustice  to 
a  few  individuals.  *  *  *  From  these  considerations,  your  committee 
have  discarded  the  idea  of  even  attempting  to  do  all  justice  in  a  pecuniary 
way." 

From  this,  it  appears  that  the  Texan  authorities,  from  the  very 
moment  in  which  they  began  to  apply  their  scaling  principles, 
found  it  impossible  to  do  even  what  they  esteemed  "justice  to  all," 
and  when  the  report  of  the  auditor  and  comptroller  comes  under 
review,  it  will  be  found  that  it  is  impossible  on  such  principles  to 
do  justice  to  any. 

"  Your  committee  are  fully  of  opinion  that,  of  the  audited  evidences  of 
indebtedness,  not  one-hundredth  part  are  now  in  the  hands  of  those  to  whom 
they  were  originally  paid  out  by  the  government,  but  have  been  in  circula 
tion  throughout  the  State ;  and  further,  that  it  is  probable  that  nine-tenths 
of  its  liabilities  have  found  their  way  out  of  the  State,  and  have  been  in 
circulation  in  other  States,  subject  to  the  caprice  of  brokers  and  others, 
whose  profession  is  to  take  advantage  of  the  necessities  and  misfortunes  of 
individuals,  as  well  as  nations,  at  various  rates  of  discount.  Your  commit 
tee  are  therefore  clearly  of  opinion  that  to  graduate  our  liabilities,  under 
these  circumstances,  will  violate  no  principles  of  moral  rectitude,  but  on 
the  contrary  is  dictated  by  the  soundest  principles  of  justice,  as  well  to  the 
citizens  of  the  country  as  to  the  creditor." 

The  reader  will  recollect  that,  as  long  as  there  was  any  necessity 
for  Texas  to  borrow,  the  fact  that  great  part  of  the  debt  was  held 
in  other  States  was  regarded  as  an  advantage  ;  but  now,  when  the 
time  comes  for  payment,  it  is  conceived  it  will  "  violate  no  prin 
ciple  of  moral  rectitude"  to  cut  down  the  debt  one-half,  inasmuch 
as  u  nine-tenths  of  the  liabilities  have  found  their  way  out  of  the 
State"  ! 


158  THE  FISCAL  HISTORY  OF  TEXAS. 

The  vulgar  prejudice  against  stock  and  exchange  brokers  is, 
moreover,  here  embodied  in  a  legislative  report.  It  may  be  that 
some  of  them  "  take  advantage  of  the  necessities  and  misfortunes 
of  individuals;"  but  if  so,  they  in  this  only  resemble  some  who  are 
engaged  in  other  branches  of  business.  If  there  were  no  regular 
dealers  in  stocks,  foreign  bank-notes,  and  other  negotiable  secur 
ities,  the  fluctuations  in  the  prices  of  these  articles  would  be  much 
greater  than  they  are  at  present.  The  brokers  in  the  United 
States  did  much  more  to  prevent  than  to  cause  fluctuations  in  the 
price  of  "  red  backs"  and  other  Texan  vendibles. 

"  There  is  another  difference  between  your  committee  and  the  comptrol 
ler,  and  that  is  in  regard  to  interest  on  the  promissory  notes  that  were  not 
intended  to  draw  interest  when  they  were  issued.  Your  committee  cannot 
consent  to  allow  interest  on  these  notes,  as  the  holders  or  receivers  had  no 
right  to,  and  consequently  could  not  have  expected  interest  on  them.  They 
were  issued  under  the  provisions  of  a  law  which  expressly  stated  that  they 
should  not  draw  interest." 

But  they  were  not  paid  when  they  fell  due,  and,  therefore, 
according  to  mercantile  usage,  interest  on  them  commenced  on  the 
very  day  on  which  they  were  dishonored.  They  were,  moreover, 
issued  under  a  pledge  that  they  should  be  received  in  payment  of 
customs.  In  violation  of  its  public  faith,  the  Texan  Government 
afterwards  refused  to  receive  them,  and  thus  deprived  these  notes 
of  much  of  the  value  they  originally  possessed.  If  Texas  means 
to  do  justice  to  her  creditors,  she  must  allow  interest  on  her  "red 
backs." 

In  conformity  with  the  principles  expressed  in  the  documents 
from  which  we  have  made  quotations,  an  act  was  passed  "  to  pro 
vide  for  ascertaining  the  debt  of  the  late  Republic  of  Texas." 
This  divided  the  debt  into  three  classes,  including,  in  the  first 
class,  all  claims  which  had  been  "  audited  or  otherwise  ascer 
tained"  at  the  time  the  law  was  passed;  in  the  second  class, 
"  claims  sufficiently  authenticated  to  admit  them  to  audit ;"  and, 
in  the  third  class,  claims  which  were  known  to  exist,  but  which 
were  not  then  "  sufficiently  authenticated  to  authorize  their  being 
audited  under  the  laws  of  the  late  Republic."  This  law  is  of  so 
much  importance  that  we  must  give  it  at  length. 

"  SECTION  1.  Be  it  enacted  by  the  Legislature  of  the  Stale  of  Texas, 
That  the  auditor  and  comptroller  of  public  accounts,  as  soon  as  practicable 
after  the  passage  of  this  act,  shall  cause  six  months'  notice  to  be  given, 


THE  FISCAL  HISTORY  OF  TEXAS.  159 

by  publication  in  some  newspaper  published  weekly  in  the  city  of  Austin, 
New  Orleans,  Washington  City,  and  New  York,  requiring  all  persons  hav 
ing  any  claim  or  demand  for  money  against  the  late  Republic  of  Texas,  to 
present  the  same  to  the  auditor  and  comptroller  of  public  accounts  on  or 
before  the  second  Monday  in  November,  1849;  and  all  claims  that  shall  not 
be  presented  on  or  before  that  time  shall  be  postponed. 

"  SECTION  2.  Be  it  further  enacted,  That  it  shall  be  the  duty  of  the 
auditor  and  comptroller  jointly  to  receipt,  under  their  seals  of  office,  for 
all  claims  presented  to  them,  setting  forth  the  par  value  thereof,  at  the 
time  the  same  accrued  or  were  issued ;  the  name  of  the  person  to  whom 
the  debt  accrued,  the  date  and  amount  thereof.  The  auditor  and  comp 
troller  shall  each  keep  a  correct  list,  in  books  kept  for  that  purpose,  sepa 
rately.  First,  the  audited  or  ascertained  claims,  such  as  stock  bonds,  trea 
sury  notes,  military  script,  or  any  other  audited  or  ascertained  claim. 
Second,  all  claims  with  sufficient  evidence  and  vouchers  to  authorize  them 
to  audit,  under  the  late  Republic  of  Texas.  Thirdly,  such  claims  as  are 
not  sufficiently  authenticated  by  vouchers.  It  is  hereby  made  the  duty  of 
the  auditor  and  comptroller  to  report  to  the  next  session  of  the  Legislature 
for  its  action. 

"SECTION  3.  Be  it  further  enacted,  That  it  shall  be  the  duty  of  the 
comptroller  and  auditor  jointly  to  report  to  the  next  biennial  session  of  the 
Legislature,  for  final  adjustment,  the  whole  amount  and  character  of  the 
public  debt  ascertained,  according  to  the  provisions  of  this  act,  together  with 
such  suggestions  concerning  the  same  as  they  may  deem  just  and  proper  \ 
and  they  shall  likewise  report,  semi-annually,  from  the  first  of  May,  1848, 
to  the  Governor,  the  amount  and  character  of  claims  presented  and  filed  in 
their  office;  and  it  shall  be  the  duty  of  the  Governor  to  cause  a  synopsis  of 
the  report  to  be  printed  in  some  newspaper  at  the  seat  of  government  in  the 
State. 

"  SECTION  4.  Be  it  further  enacted,  That  it  shall  be  the  duty  of  the 
auditor  and  comptroller  of  public  accounts  to  classify  all  claims  presented 
under  the  provisions  of  this  act,  reducing  the  same  to  the  actual  par  value 
which  may  have  been  realized  by  the  late  Republic,  and  may  report  such 
further  classification  as  they  may  deem  best  calculated  to  preserve  the  rights 
of  the  State,  and  to  do  equity  to  the  holders  of  the  claims :  and  the  classi 
fication  and  rate  of  payment  recommended  by  the  auditor  and  comptroller 
shall  be  subject  to  the  revision,  amendment,  and  ratification  of  the  next 
Legislature :  and  that  this  act  take  effect  from  and  after  its  passage." 

"Approved  March  20,  1848." 

Thus  did  Texas  compel,  or  try  to  compel,  her  creditors  to  bring 
in  their  claims  to  be  scaled  down  to  one-half,  one-fourth,  or  one- 
fifth  of  their  original  amount.  Far  different  was  the  conduct  of 
the  United  States  Government  when,  in  1791,  it  passed  a  law  to 
fund  the  revolutionary  debt.  So  far  was  it  from  using  compulsion, 
that  it  expressly  enacted  that  such  of  its  creditors  as  were  notf 
willing  to  accept  the  terms  offered  should  be  paid  the  same  rate 
of  interest  as  those  that  did  accept. 


160  THE  FISCAL  HISTORY  OF  TEXAS. 

An  attempt  has  been  made  to  justify  this  proceeding  of  Texas, 
under  the  plea  that  a  sovereign  State  has  "  a  right  to  define  its 
debts."  This  cannot  be  either  disputed  or  denied.  But  the  debts 
of  Texas  were  sufficiently  "  defined''  in  the  laws  under  which  they 
were  incurred,  and  the '  acknowledgments  issued  to  the  creditors. 
Nothing  can  possibly  be  more  "definite"  than  Texas's  promise  to 
pay  dollars  as  expressed  in  her  treasury  notes,  bonds,  certificates 
of  stock,  and  audited  paper.  In  some  cases,  she  "  defined"  the 
same  debt  as  many  as  three  times.  She  first  passed  the  debts 
through  regular  audit,  and  granted  drafts  or  certificates  acknow 
ledging  the  amount  due  to  each  creditor.  Then  she  redeemed 
those  drafts  by  giving  in  lieu  of  them  treasury  notes  of  the  same 
amount.  Then,  in  order  to  get  these  floating  liabilities  out  of  the 
hands  of  the  holders,  she  funded  them  at  par.  Thus  she,  in  three 
different  forms,  at  three  different  times,  acknowledged  the  amount 
due,  which  was,  we  think,  "  defining"  them  with  sufficient  exact 
ness  for  all  practical  purposes.  After  this,  to  call  in  these  evi 
dences  of  debt,  and  scale  them  down  to  a  small  part  of  their  ori 
ginal  amount,  and  then  sustain  this  proceeding  under  the  pretext 
that  Texas  has  "  a  right  to  define  her  debt"  "by  her  municipal 
regulations"  is  to  be  very  delicate  in  the  use  of  language.  The 
true  name  of  the  thing  is  "repudiation,"  and  they  who  support 
the  principle  ought  not  to  be  ashamed  of  the  word. 


THE  FISCAL  HISTORY  OF  TEXAS.  161 


CHAPTER    XXV. 

PROCEEDINGS  UNDER  THE  THIRD  LEGISLATURE  :    1849-50. 

Governor  Wood  recommends  that  land  be  given  to  the  public  creditors — Reasons 
why  Texas  had  no  longer  a  deep  interest  in  sustaining  her  credit — Hardships 
endured  by  civil  officers,  by  soldiers,  and  others — Distinction  between  their  cases 
and  that  of  contract  creditors — Auditor  and  comptroller  make  a  report  scaling 
down  the  claims  of  creditors  to  half  their  original  amount — Time  prolonged  in 
which  audited  claims  might  be  scaled  without  being  "barred" — Audited  claims 
made  exchangeable  for  land-script  at  fifty  cents  an  acre — Act  declaring  that  all 
liabilities  of  the  Republic  shall  cease  to  bear  interest  after  July  1,  1850. 

THE  third  Legislature  met  at  Austin  November  5,  1849,  and  on 
the  next  day  Governor  Wood  sent  them  a  message,  some  passages 
of  which  will  be  interesting  to  the  reader : — 

"  The  subject  of  our  public  debt  is  one  of  great  importance,  and  in  our 
situation  so  difficult  as  to  forbid  the  hope  that  any  action  which  may  be 
taken  upon  the  subject  will  be  satisfactory  to  all  parties,  unless  the  United 
States  should  purchase  a  portion  of  our  domain. 

"  Our  only  resource  for  the  payment  of  the  debt  is  our  public  lands. 

fl  A  large  portion  of  our  public  domain  lies  remote  from,  and  is  incon 
veniently  situated  with  reference  to,  the  present  settled  and  organized 
portion  of  our  State,  and  of  consequence  is  rendered  of  far  less  value  and 
importance  to  the  State  than  it  is  intrinsically  worth.  This  territory  would 
seem  to  be  of  great  value  and  importance  to  the  United  States,  viewed  with 
reference  to  the  purposes  which  it  would  serve  that  government  in  her 
settling  her  Indians,  and  in  acquiring  a  complete  jurisdiction  over  all  her 
Indian  relations,  now  rendered  so  difficult  and  complicated,  by  the  fact  that 
she  has  no  jurisdiction  over  the  soil.  If,  therefore,  the  United  States 
Government  should  be  disposed  to  purchase  this  territory  for  a  fair  consider 
ation,  I  should  conceive  it  to  be  the  interest  of  the  State  so  to  dispose  of  it. 

"  The  State  has  no  disposition  to  evade  the  payment  of  her  debt,  and 
would  sacrifice  much  rather  than  that  history  should  record  such  a  reproach 
against  her.  Nevertheless,  it  is  not  to  be  expected,  nor  is  it  our  duty  to 
sacrifice  too  much  to  this  end.  The  only  fund  to  which  reasonable  men 
ever  looked  for  the  payment  of  this  debt  was  her  public  lands.  To  have  ex 
pected  twenty  thousand  tax-payers  to  discharge  it  from  taxation  on  their 
own  industry  and  wealth  was  an  absurdity  too  gross  to  have  been  ever  enter 
tained. 

11  It  is  conceived  that,  if  Texas  makes  proper  provision  by  which  the 
holders  of  her  debt  can  convert  it  into  land  at  fair  rates,  the  State  will  not 
11 


162  THE  FISCAL  HISTORY  OF  TEXAS. 

have  failed  in  furnishing  to  the  world  the  highest  evidence  of  her  disposition 
to  pay  it." 

Let  it  be  that  "  the  only  fund  to  which  reasonable  men  [in  Texas] 
ever  looked  for  the  payment  of  this  debt  was  her  public  lands," 
such  of  her  creditors  as  resided  without  the  bounds  of  the  Republic 
could  not  be  supposed  to  be  equally  knowing.  The  Texan  Go 
vernment  promised  to  pay  them  money,  and  they  had  a  right  to 
expect  what  was  promised..  Whether  the  money  was  procured  by 
sale  of  lands,  or  by  taxation,  was  to  them  matter  of  indifference. 
The  calculations  of  the  Texan  Secretaries  of  the  Treasury  of  the 
overflowing  revenue  that  was  to  be,  were  well  adapted  to  bolster 
up  their  hopes,  and  so  were  the  expectations  so  confidently  enter 
tained  that  a  loan  would  be  negotiated  in  Europe.  It  was  natural 
to  expect  that  a  part  of  this  money  would  be  applied  to  redeeming 
a  portion  of  the  floating  debt,  and  paying  the  interest  on  the 
funded.  Even  supposing  the  whole  five  millions  used  in  founding 
a  national  bank,  as  the  said  bank  would  have  operated  exclusively 
on  national  funds,  and  been  closely  connected  with  the  national 
government,  it  could  hardly  have  failed  to  have  a  favorable  in 
fluence,  for  a  time  at  least,  on  the  price  of  the  public  securities  of 
the  Republic. 

"  The  State,"  says  Governor  Wood,  "  has  no  disposition  to  evade 
the  payment  of  her  debt." 

By  this  he  meant  paying  just  such  an  amount,  and  in  just  such 
form  as  the  State  might  prescribe. 

"And,"  he  continued,  "  the  State  would  sacrifice  much  rather 
than  that  history  should  record  such  a  reproach  against  her.  Never 
theless,  it  is  not  to  be  expected,  nor  is  it  our  duty  to  sacrifice  too 
much  to  this  end." 

The  "sacrifice"  contemplated,  if  sacrifice  it  could  be  called,  was 
a  very  small  one.  If  we  are  correctly  informed,  when  the  scaling 
system  was  projected,  it  was  intended  to  pay  the  public  creditors 
the  reduced  amount  of  their  claims  in  lands  at  two  dollars  an  acre, 
when  at  that  very  time  land-script  was  selling  in  the  streets  of 
Austin  at  fifteen  cents  an  acre.  Had  this  scheme  been  carried 
out,  the  owner  of  eight  per  cent,  bonds  would,  after  finding  his 
claim  reduced  to  twenty  cents  in  the  dollar  by  the  scaling  process, 
have  next  found  himself  paid,  not  in  money,  but  in  a  commodity 
worth  not  one-sixth  the  price  at  which  he  would  have  been  com- 


THE  FISCAL  HISTORY  OF  TEXAS.  163 

pelled  to  receive  it.  The  owner  of  a  bond  for  one  hundred  dollars 
would  then  have  been  paid,  not  one  hundred  dollars  in  gold  or  sil 
ver,  but  land-script  for  fifty  acres  of  the  market  value  of  seven 
dollars  and  fifty  cents. 

It  may  seem  strange  that  a  government  which  was  always  pro 
fessing  a  desire  honorably  to  fulfil  its  engagements  should  ever 
have  entertained  such  a  project;  but  for  the  state  of  feeling  which 
then  prevailed,  various  reasons  may  be  given  : — 

1.  As  Texas  was  no  longer  an  independent  Republic,  she  no 
longer  had  a  deep  interest  in  sustaining  her  credit.     If  she  had 
remained  an  independent  Republic,  the  inability  to  negotiate  a  loan 
might,  in  some  crises,  have  endangered  her  national  existence.    As 
a  member  of  the  American  Union,  ability  to  borrow  was  no  longer 
necessary,  though  it  might  sometimes  be  convenient.     The  Federal 
Government  was  bound  to  protect  her  against  foreign  foes,  and 
against  attacks  from  the  Indians.     One  of  the  Secretaries  of  the 
Treasury,  under  the   Republic,  had  made  a  proposition  to  scale 
down,  not  the  principal,  but  the  interest.     But  it  was  not  acted 
upon  by  the  Congress.     No  measures  of  this  kind  were  ever  taken 
by  the  Government  of  the  Republic.    But  in  the  very  first  Legisla 
ture  of  the  State,  the  scaling  principle  was  adopted,  and  it  has  been 
adhered  to  to  this  day. 

2.  At  this  time,  the  debtor  interest  was  completely  predominant 
in  Texas.     Nine-tenths  of  the  public  liabilities,  as  was  declared  in 
one  of  the  legislative  reports,  were  held  beyond  the  bounds  of  the 
State.     Few,  comparatively  speaking,  had  a  personal  interest  in 
seeing  these  debts  paid.    Many  had  a  personal  interest  in  prevent 
ing  their  being  paid,  as  then  they  would  have  been  compelled  to 
contribute  their  portion  in  the  form  of  taxes.    There  was  nobody  to 
plead  the  cause  of  the  public  creditors,  as  it  ought  to  have  been 
pleaded,  before  either  the  Legislature  or  the  people.     He  would 
have  been  a  bold  man  who  had  dared  to  stand  up  in  defence  of 
their  rights.     If  a  candidate  for  public  honors,  he  would,  in  an 
election,  have  been  beaten  ten  to  one  by  his  competitor. 

3.  The  longer  a  debt  remains  unpaid,  the  weaker  becomes  the 
sense  of  the  moral  obligation  it  imposes.     A  young  widow  will,  in 
the  first  burst  of  grief  for  her  departed  lord,  order  a  costly  monu 
ment.     If  the  stonecutter  presents  his  bill  in  due  season,  he  will 
be  paid.     If  he  delays  presenting  it,  he  will  be  paid,  or  not  paid, 


164  THE  FISCAL  HISTORY  OF  TEXAS. 

according  to  circumstances.  A  clerk  in  the  Treasury  Department 
was  once  summoned  before  the  Secretary  for  not  having  discharged 
certain  personal  liabilities.  "What  did  you  say  to  the  Secretary  ?" 
asked  a  fellow-clerk.  "I  told  him,"  replied  the  other,  "that  I 
had  no  notion  of  bothering  myself  about  those  old  debts."  "  That 
is  right,"  continued  his  friend;  "you  stick  to  that.  Why  should 
you  trouble  yourself  about  your  old  debts  ?  It  is  quite  enough  that 
you  pay  your  new  ones." 

Independence  of  Mexico  was  fully  achieved.  Why  should  the 
Texans  concern  themselves  as  to  who  paid  for  it  ?  If  an  old  debt  is 
a  very  heavy  one,  such  as  it  seems  impossible,  or  almost  impossible, 
to  pay,  the  less  does  it  afflict  the  debtor,  be  that  debtor  an  indi 
vidual  or  a  government.  This  was  the  precise  case  of  the  Texans. 
At  no  time  had  they  had  the  ability  to  pay,  in  money,  one-tenth 
part  of  what  they  owed.  For  years  they  had  given  over  all  at 
tempts  to  pay,  even  in  the  indirect  way  of  receiving  their  public 
securities  for  customs  and  direct  taxes.  To  ask  them  to  pay  their 
public  debt,  according  to  contract,  was,  in  their  judgment,  very 
much  like  asking  a  man  to  pay  a  debt  which  had  long  been  "barred 
by  the  statute  of  limitations." 

4.  The  creditors,  both  within  the  bounds  of  Texas  and  without 
it,  were  so  disheartened  by  the  repeated  violations  of  faith  they 
had  experienced,  that  they  seem  to  have  made  no  vigorous  efforts 
in  defence  of  their  rights.     Many  of  them  appear  to  have  been 
willing  to  accept  of  almost  anything  by  way  of  satisfaction  of  their 
claims,  even  land-script,  at  two  dollars  an  acre,  when  the  market 
value  of  the  same  was  only  fifteen  cents  an  acre. 

5.  The  chief  reason,  however,  why  public  opinion  took  the  direc 
tion  that  the  debt  should  be  paid  only  in  part  was  the  notion  that 
all  that  morality,  justice,  and  religion  required  was  that  the  State 
should  give  as  much  as  she  had  received ;  and  that  the  obligation 
to  pay  a  debt  diminished  if  the  evidence  of  it  had  passed  from  the 
original  claimant.     These  notions  took  very  firm  possession  of  the 
public  mind  in  Texas,  and  they  are,  to  this  day,  the  chief  obstacles 
her  creditors  have  to  contend  with. 

"I  was,"  said  one  gentleman,  "a  custom-house  officer.  My 
salary  was  five  dollars  a  day.  I  was  paid  in  treasury  notes.  On 
one  occasion,  I  parted  with  such  notes,  of  the  face  value  of  fifteen 
dollars,  for  three  cents  on  the  dollar.  Do  you  think  that  I  will 


THE  FISCAL  HISTOKY  OF  TEXAS.  165 

ever  consent  that  the  man  in  whose  hands  these  notes  may  now 
be  found  shall  be  paid  fifteen  dollars  in  full,  when  I  received  but 
forty-five  cents?" 

The  case  of  this  gentleman,  it  must  be  admitted,  is  a  hard  one ; 
and  so  is  that  of  multitudes  of  others  of  the  civil  officers  of  Texas. 
But  the  State  made  an  express  stipulation  with  them  that,  they 
should  receive  their  pay  in  treasury  notes.  In  paying  them  in 
this  kind  of  paper,  the  State  fulfilled  its  contract  with  them  to  the 
letter.  The  treasury  note  itself  was  not  a  contract  to  pay  them 
especially,  but  any  one  into  whose  hands  the  notes  might  pass.  If 
they  disposed  of  this  contract  to  another  for  a  small  consideration, 
they  have  no  right  to  complain.  It  was  their  own  fault,  or,  it  may 
be,  their  misfortune  ;  but,  whether  it  was  through  fault  or  misfor 
tune  that  they  parted  with  it,  that  does  not  in  the  least  affect  the 
validity  of  the  claim.  The  man  who  bought  a  treasury  note  at 
three  cents  on  a  dollar  took  on  himself  the  risk  of  ultimate  pay 
ment,  a  risk  which  the  original  holder  was  not  willing  to  undergo. 
If,  fifteen  years  afterwards,  Texas  has  the  ability  to  pay  the  note, 
she  ought  to  pay  it,  no  matter  in  whose  hands  it  may  be,  for  such 
is  the  contract. 

Some  of  the  speculators  in  Morus  Multicaulis  used  to  calculate 
their  losses,  not  by  the  amount  of  money  they  had  actually  sunk, 
but  by  what  they  might  have  gained  if  they  had  sold  their  buds 
and  roots  when  the  price  was  highest.  The  original  holders  of 
Texan  securities,  who  now  oppose  their  payment,  act  on  similar 
principles.  But  they  do  not  carry  their  principles  far  enough.  If 
they  will  take  up  the  New  York  Price-Current,  and  calculate  what 
they  might  have  gained  by  buying  certain  stocks  when  they  were 
at  the  lowest  price,  and  selling  them  when  they  were  at  the  high 
est,  they  will  discover  that  they  have  lost  millions. 

It  is  a  most  unreasonable  thing  in  a  man  to  be  uttering  his 
lamentations  because  he  sold  his  cotton  in  one  year  at  six  cents 
a  pound,  when,  if  he  had  kept  it  only  a  few  months,  he  might 
have  got  ten  cents;  or  to  bewail  his  misfortune  in  having  parted 
with  his  flour  at  five  dollars  a  barrel,  when  a  year  or  two  after 
wards  it  rose  to  ten.  So  it  is  most  unreasonable  in  the  original 
claimants  against  Texas  to  be  regretting  having  parted  with  their 
evidences  of  debt;  and  most  unjust  in  them  now  to  prevent  pay- 


166  THE  FISCAL  HISTORY  OF  TEXAS. 

ment  being  made  to  those  who  bought  those  evidences  -when  the 
debts  were  regarded  as  desperate. 

When  the  Legislature  at  Austin  was  discussing  the  propriety  of 
paying  the  public  creditors,  an  old  soldier  made  a  speech  outside 
of  the  capitol,  which  electrified  his  audience.  We  regret  that  we 
cannot  give  this  speech  verbatim.  The  substance  of  it  was  that 
coming,  on  one  occasion,  to  Austin,  he  parted  with  all  the  treasury 
notes  and  other  Texan  securities  he  had  received  in  pay  of  a  long 
term  of  military  duty,  in  exchange  for  a  little  coffee,  a  little  sugar, 
and  a  calico  gown  for  his  wife — and  that  a  "  scant  pattern."  At 
that  moment  a  cry  was  raised  by  a  woman  that  her  child  had 
been  carried  off  by  the  Indians.  He  had  still  remaining  his  "head- 
right,"  or  claim  as  a  settler  to  a  league  of  land.  On  the  impulse 
of  the  moment,  he  gave  his  "head-right"  to  a  bystander  in  ex 
change  for  a  Spanish  pony.  He  pursued  the  Indians,  and  reco 
vered  the  child.  But  he  could  no  longer  enumerate  Texan  securi 
ties  among  his  possessions.  He  concluded  by  saying  that  nothing 
the  Legislature  could  do  by  way  of  paying  the  public  debt  would 
afford  any  relief  to  the  old  soldiers,  as  they  had  long  since  dis 
posed  of  the  evidence  of  their  claims. 

Not  only  the  old  soldiers  and  the  civil  officers,  but  all  the  inha 
bitants  of  Texas  have  cause  to  complain  of  the  losses  they  have 
suffered  from  the  folly  of  their  revolutionary  leaders,  in  conducting 
the  finances  of  the  Republic  on  wrong  principles,  in  removing  the 
seat  of  the  government  to  the  foot  of  the  Cordilleras,  and  in  pro 
voking  conflicts  with  the  Indians  for  the  purpose  of  extending  the 
area  of  land-speculations.  But  the  Texan  Government  never 
made  a  contract  that  it  would  refund  to  such  of  its  population 
as  would  follow  it  into  the  interior  the  additional  price  they 
would  have  to  pay  for  sugar,  coffee,  and  other  supplies,  or  the  cost 
of  recovering  such  of  their  children  as  might  be  stolen  by  the 
Indians.  Neither  did  it  contract  to  make  good  to  the  original 
claimants  the  difference  between  the  prices  at  which  they  received 
evidences  of  the  public  debt,  and  the  prices  at  which  they  might 
part  with  them. 

The  case  of  the  civil  officers,  old  soldiers,  and  other  inhabitants 
of  Texas  is  one  of  great  hardship.  That  of  the  holders  of  the 
notes,  bonds,  and  other  obligations  of  the  Republic  is  one  of  posi 
tive  injustice.  The  latter  are  statute  creditors.  Regular  con- 


THE  FISCAL  HISTORY  OF  TEXAS.  167 

tracts  have  been  entered  into  with  them,  and  these  must  be  ful 
filled  to  the  letter:  otherwise  Texas  will  infringe  that  provision  of 
the  United  States  Constitution  which  declares  that 

"  No  State  shall  pass  any  law  impairing  the  obligation  of  contracts." 

If  Texas  has  no  political  power  to  pass  laws  impairing  the  obli 
gation  of  private  contracts,  she  has  no  moral  right  to  pass  laws 
impairing  the  obligation  of  her  own  contracts. 

If  she  persists  in  her  present  course,  she  will  also  violate  the 
important  principle,  contained  in  the  16th  Article  of  the  Declara 
tion  of  Rights,  which  formed  part  of  her  constitution  as  an  inde 
pendent  Republic : — 

"  No  retrospective,  or  ex  post  facto  law,  or  law  impairing  the  obligation 
of  contracts,  shall  be  made." 

She  will  also  violate  the  principles  of  that  provision  of  her  State 
constitution  which  declares  that 

"  No  bill  of  attainder,  ex  post  facto  law,  retroactive  law,  or  any  law 
impairing  the  obligations  of  contracts,  shall  be  made." 

The  contract  debts  of  Texas  stand  against  her  in  full,  broad 
daylight,  supported  by  every  principle  of  law,  human  and  divine. 
But  political  leaders  in  Texas  had  to  address  men  situated  like  the 
custom-house  officer  and  the  old  soldier  whose  stories  we  have 
given,  and  they  had  no  difficulty  in  persuading  them  that  paying 
one-half,  one-fourth,  or  one-fifth  as  much  as  the  contract  called 
for  was  all  that  was  required  by  justice,  morality,  and  religion.  If 
these  old  custom-house  officers,  old  soldiers,  and  others  had  retained 
their  original  claims,  they  would  have  seen  the  matter  in  a  very  dif 
ferent  light.  And  if  the  political  leaders  had  been  as  deeply  inte 
rested  in  Texan  stocks  as  they  were  in  Texan  lands,  their  oratory 
would  have  been  of  a  diiferent  complexion. 

If  an  impartial  observer  should  suppose  the  case  to  have  been 
simply  that  of  "  the  Land-Speculators  versus  the  Stock-Specu 
lators,"  he  would  not  err  greatly.  And  when  informed  that  the 
land-speculating  interest  was  to  the  stock-speculating  interest  as 
one  hundred  to  one,  in  both  numbers  and  influence,  he  will  have 
no  difficulty  in  discovering  why  the  scaling  system  was  adopted. 

In  conformity  with  the  requisitions  of  the  scaling  act,  the  audi 
tor  and  comptroller  made  a  report,  December  27,  1849,  from 
which  it  appeared  that  the  creditors  had,  under  the  threat  of  for- 


168  THE  FISCAL  HISTORY  OF  TEXAS. 

feiture  which  had  been  held  out  to  them,  brought  in  their  claims 
to  the  amount  of  about  $7,000,000,  and  that  these  had  been  scaled 
down  to  about  $3,000,000.  The  Governor,  P.  H.  Bell,  accom 
panied  this  report  with  a  message  (Jan.  1,  1850),  in  which  he 
stated  that  there  was  "  a  very  large  amount  of  outstanding  lia 
bilities  not  presented  for  audit,  and  justice  would  seem  to  demand 
that  the  holders  of  these  liabilities  should  not  be  excluded  from 
the  benefits  intended  to  be  conferred  by  the  passage  of  the  act  of 
20th  March,  1848." 

In  conformity  with  this  recommendation,  an  act  was  passed, 
February  8, 1850,  extending  the  time  for  presenting  claims  to  the 
first  Monday  in  September,  1851,  and  declaring  that  all  claims 
not  presented  at  that  time  should  be  "barred." 

On  the  llth  of  February,  1850,  an  act  was  passed  by  which 
certificates  of  audited  claims  were  made  exchangeable  for  land- 
script  at  the  rate  of  fifty  cents  an  acre.  This  was  offering  the 
creditors  much  better  terms  than,  we  have  been  informed,  it  was 
intended  to  offer  them,  when  the  scaling  system  was  first  pro 
jected. 

The  same  act  contained  a  proviso 

"  That  all  liabilities  of  the  late  Republic  of  Texas,  whether  the  same 
have  or  have  not  been  presented  to  the  auditor  and  comptroller  under  the 
provisions  of  the  act"  of  March  20,  1848,  "shall  cease  to  draw  interest 
from  and  after  the  first  day  of  July,  1850." 

This  was  an  arbitrary  measure.  A  government  that  is  prepared 
to  pay  the  principal  of  a  treasury  note  or  other  obligation  which 
has  arrived  at  maturity  has  a  right  to  say  that  interest  thereon 
shall  cease.  But  a  government  that  has  suffered  its  notes  and 
bonds  to  be  dishonored  has  no  right  to  say  interest  on  them  shall 
cease  till  that  day  on  which  it  is  prepared  to  pay  the  principal  in 
full. 


THE  FISCAL  HISTORY  OF  TEXAS.  169 


CHAPTER    XXVI. 


PROCEEDINGS  AT  FIRST   SESSION  OF  THE  THIRTY-FIRST  CONGRESS  OF 
THE  UNITED  STATES:    1849-50. 

Few,  if  any,  of  the  creditors  embrace  the  offer  of  land  in  payment  of  their  claims — 
Reasons  for  this — Difficulties  about  land-titles — Change  in  the  prospects  of 
Texas — Motion  of  Mr.  Benton  in  the  United  States  Senate — Motion  of  Mr.  Clay 
— Extract  from  Mr.  Clay's  speech — Motion  of  Mr.  Pearce,  of  Maryland — Extracts 
from  Mr.  Pearce's  speech — Passage  of  the  "Boundary  Bill,"  or  bill  for  drawing 
the  line  between  Texas  and  New  Mexico,  and  for  paying  the  creditors  of  Texas. 

WE  have  noted  the  fact  that  the  Legislature  had,  at  its  last  ses 
sion,  passed  an  act  authorizing  the  holders  of  audited  claims  to 
exchange  them  for  land-script  at  fifty  cents  an  acre.  Nothing 
better  can  be  hoped  for  from  an  insolvent  debtor,  when  he  cannot 
pay  in  money,  than  to  pay  in  kind,  as  well  as  he  can  ;  and  it  re 
mains  for  the  creditor  to  determine  whether  he  will  accept  such 
offer,  or  wait  for  such  better  terms  as  the  chapter  of  accidents  may 
afford.  Few,  if  any,  of  the  creditors  of  Texas  accepted  this  offer. 
The  average  value  of  all  the  lands  in  the  State,  subject  to  taxation, 
was,  in  the  year  1850,  according  to  the  comptroller's  report, 
sixty-six  cents  an  acre.  If  the  seated  lands,  with  all  the  improve 
ments  on  them,  were  worth  only  sixty-six  cents  an  acre,  fifty  cents 
was  a  high  price  for  lands  in  a  state  of  nature.  The  creditor, 
after  getting  possession  of  the  script,  would  have  had  to  pay  cer 
tain  office-fees  before  he  could  get  legal  possession  of  the  land. 
He  might,  indeed,  retain  his  script ;  but  if  he  retained  it  too  long, 
all  the  best  tracts  might  be  taken  up. 

To  most  of  the  creditors  of  Texas,  this  offer  was  not  very  tempt 
ing.  The  greater  part  of  them  resided  at  a  great  distance.  From 
New  York  to  Austin,  by  the  post-route,  is  twenty-five  hundred 
miles.  Experience  had  shown  that  land-speculations,  carried  on 
by  non-residents,  are  very  seldom  profitable.  Everything  must 
then  be  intrusted  to  agents,  and  the  commission  which  can  be 
allowed  them  is  seldom  such  as  to  interest  them  deeply  in  the 
business. 


170  THE  FISCAL  HISTORY  OF  TEXAS. 

After  taxes  on  land  have  been  paid  regularly  for  years,  the 
whole  may  be  forfeited  by  a  simple  oversight  of  the  owner  or  the 
agent,  or  it  may  be  by  some  accident  to  the  mail  preventing  the 
arrival  of  a  remittance  in  due  season.  In  addition  to  this,  as  is 
well  known,  the  land  of  non-residents  is  a  fair  object  of  plunder  to 
all  who  live  near  it. 

For  United  States  land-script,  there  is  a  demand  in  the  Northern 
cities,  because  there  is  a  constant  flood  of  emigrants  from  New 
England  and  the  Middle  States  to  the  North- Western  States.  But 
though  New  England  and  the  Middle  States  will  furnish  to  Texas 
their  full  quotas  of  mechanical  skill  and  mercantile  capital,  few 
farmers  from  New  England  or  Pennsylvania  will  migrate  to  that 
distant  region.  Besides  this,  the  script  was  a  poor  investment  for 
speculation,  as  Texas  had,  in  satisfaction  of  soldiers'  and  settlers' 
claims,  and  in  other  ways,  issued  so  many  patents  as  to  supply  all 
the  land  wanted  for  cultivation  for  many  years  to  come. 

The  public  lands  of  the  United  States  are  regularly  divided  into 
sections  of  six  hundred  and  forty  acres,  and  these  again  into  half 
and  quarter  sections  and  eighths.  There  is  no  dispute  here  about 
metes  and  bounds,  and  the  title  which  a  patent  confers  is  incon 
trovertible.  It  is  different  in  Texas,  as  is  evident  from  the  follow 
ing  passages  in  Governor  Bell's  message  of  November  3,  1851 : — 

"  There  is  nothing  which  so  much  retards  the  growth  and  prosperity  of 
a  country  as  the  unsettled  condition  of  its  land-titles.  This  is  an  evil  from 
which  our  State  has  greatly  suffered,  and  though  it  has  been  partially  re 
moved  by  time  and  the  adjudication  of  our  courts,  still  it  is  a  serious  obsta 
cle  to  her  rapid  advance  in  prosperity.  Whilst  I  do  not  pretend  to  be 
conversant  with  the  intricate  system  of  our  land-laws,  or  to  be  able  to  de 
vise  any  general  plan  for  the  quieting  of  land-titles,  I  will  venture  to  sug 
gest  one  enactment,  at  least,  which,  if  made  by  the  Legislature,  would,  in  my 
opinion,  be  attended  with  the  most  beneficial  results. 

"  Under  the  law  as  it  now  exists,  locations  may  be  made  upon  any  lands 
claimed  to  be  held  by  prior  grants,  and  the  parties  holding  by  or  under 
such  prior  grants  may  be  forced  into  court  to  defend  the  validity  of  their 
titles. 

"  The  only  restriction  known  to  me,  upon  this  right  of  location,  is  that 
imposed  by  the  act  of  February  5,  1850,  which  prevents  them  from  being 
made  upon  lands  previously  titled  or  surveyed  within  the  limits  of  the 
colonies  of  Austin,  De  Witt,  and  De  Leon.  These  locations  are  usually 
made,  and  suits  instituted  upon  them  for  some  supposed  defects  in  the  prior 
grant  or  title,  and  if  the  locator  fails  to  defeat  the  same,  he  can  lift  his  cer 
tificate,  make  new  locations  upon  other  lands,  and  test  the  validity  of  the 
title  under  which  they  are  held.  This  system  of  location  may  be  carried  to 
an  indefinite  extent,  and  the  evils  resulting  from  it  are  so  obvious  that  I 


THE  FISCAL  HISTORY  OF  TEXAS.  171 

deem  it  unnecessary  to  mention  them.  The  right  of  a  person  holding  a 
genuine  and  valid  certificate  to  locate  the  same  upon  any  of  the  vacant  and 
unappropriated  domain  belonging  to  the  State,  will  not  be  denied  by  me; 
but  this  right  of  location,  when  extended  to  lands  claimed  to  be  owned  by 
private  individuals,  should,  in  my  judgment,  be  restricted,  and  guarded  from 
abuse  by  legislative  enactment. 

"It  is  our  duty  as  well  as  our  policy  to  discourage  litigation.  This  object 
•will  certainly  be  effected,  to  some  extent,  by  restricting  the  facilities,  now 
afforded  to  those  who  make  locations  upon  titled  lands,  of  contesting  such 
titles.  I  respectfully  suggest,  therefore,  for  the  consideration  of  the  legis 
lature,  the  propriety  of  passing  a  law  which  will  prevent  certificates,  here 
after  located  upon  lands  which  the  records  of  the  county  show  had  been 
previously  deeded  or  titled,  from  being  removed  or  located  elsewhere,  in 
case  such  locations  were  not  sustained  by  the  judgment  of  a  competent 
court;  and  I  further  suggest  that  the  law  should  compel  the  locator,  in 
such  cases,  within  six  or  twelve  months  after  making  his  locations,  to  bring 
suit  upon  the  same  against  those  claiming  the  lands  under  a  previous  grant, 
in  order  that  the  question  of  title  may  be  settled  in  a  reasonable  time. 

"  It  seems  to  me  that  those  who  seek  to  set  aside  prior  titles  for  imagined 
defects  in  the  same  should  run  some  risk  as  well  as  those  whose  titles  they 
contest.  It  would  check  litigation  by  making  locators  cautious,  and  pre 
vent  much  of  that  wild  spirit  of  speculation  which  is  at  war  with  the  true 
interests  of  the  country." 

Such  a  condition  of  things  as  this  is  very  embarrassing  to  non 
resident  landholders.  Those  who  are  on  the  spot  can  better  con 
tend  with  such  difficulties.  They  can  manage  their  business  with 
out  the  intervention  of  agents.  When  immigrants  arrive,  they  can 
deal  with  them  directly.  They  have  thus  great  advantages  over 
non-residents.  Yet  few,  if  any,  of  the  creditors  residing  within 
the  State,  embraced  the  offer  of  land-script  in  payment  of  their 
dues. 

But  a  change  was  soon  to  take  place  in  the  circumstances  of  the 
Texan  Government.  It  had  long  been  desirous  of  making  a  sale 
of  a  portion  of  its  domain  to  the  United  States.  There  was  now 
a  fair  prospect  of  this  object  being  accomplished. 

On  the  16th  of  January,  1850,  Mr.  Benton  submitted  to  the 
United  States  Senate  a  bill,  providing,  among  other  things,  that, 
if  Texas  would  cede  to  the  United  States  a  certain  portion  of 
territory,  arid  relinquish  all  claim  on  the  United  States  "for  liabil 
ity  of  the  debts  of  Texas,"  &c.,  the  United  States  would  pay  to 
Texas  the  sum  of  fifteen  million  dollars  in  .five  per  cent,  stocks, 
redeemable  fourteen  years  after  date. 

Mr.  Benton  supported  this  bill  in  a  speech  marked  with  his  usual 
ability. 


172  THE  FISCAL  HISTORY  OF  TEXAS. 

On  the  29th  of  the  same  month,  the  subject  was  submitted  to 
the  Senate  in  a  different  form  by  Mr.  Clay,  as  one  of  the  "  Com 
promise  Measures;"  a  particular  class  of  measures  intended  to 
satisfy  both  the  North  and  the  South,  embracing  the  admission  of 
California,  the  establishing  of  the  boundary  line  between  Texas  and 
Mexico,  the  abolition  of  the  slave  trade  in  the  District  of  Columbia, 
and  the  Fugitive  Slave  Act. 

The  fourth  resolution  was  as  follows : — 

Resolved,  That  it  be  proposed  to  the  State  of  Texas  that  the  United 
States  will  provide  for  the  payment  of  all  that  portion  of  the  legitimate  and 
bona  fide  public  debt  of  that  State,  contracted  prior  to  its  annexation  to  the 
United  States,  and  for  which  the  duties  on  foreign  imports  were  pledged 
by  the  said  State  to  its  creditors,  not  exceeding  the  sum  of  $ in  con 
sideration  of  the  said  duties  so  pledged  having  been  no  longer  applicable 
to  that  object  after  the  said  annexation,  but  having  thenceforward  become 
payable  to  the  United  States;  and  upon  the  condition,  also,  that  the  said 
State  of  Texas  shall,  by  some  solemn  and  authentic  act  of  her  Legislature, 
or  of  a  convention,  relinquish  to  the  United  States  any  claim  which  it  has 
to  any  part  of  New  Mexico." 

In  support  of  this  resolution,  Mr.  Clay  made  the  following  re 
marks  : — 

"It  proposes  that  the  Government  of  the  United  States  will  provide  for 
the  payment  of  all  that  portion  of  the  debt  of  Texas  for  which  the  duties 
received  upon  imports  from  foreign  countries  were  pledged  by  Texas  at  a 
time  when  she  had  authority  to  make  pledges.  How  much  it  will  amount 
to  I  have  endeavored  to  ascertain,  but  all  the  means  requisite  to  the  attain 
ment  of  the  sum  have  not  been  received,  and  it  is  not  very  essential  at  this 
time,  because  it  is  the  principle,  and  not  the  amount,  that  is  most  worthy  of 
consideration.  Now,  sir,  the  ground  on  which  I  base  this  liability  on  the 
part  of  the  United  States  to  pay  a  portion  of  the  debt  of  Texas  is  not  new 
to  me.  It  is  one  which  I  have  again  and  again  announced  to  be  an  opinion 
entertained  by  me.  I  think  it  is  founded  upon  principles  of  eternal  truth 
and  justice.  Texas,  being  an  independent  power,  recognized  as  such  by 
all  the  great  powers  of  the  earth,  invited  loans  to  be  made  to  her  to  enable 
her  to  prosecute  the  then  existing  war  between  her  and  Mexico.  She  told 
those  whom  she  invited  to  make  these  loans  that,  l  if  you  make  them,  the 
duties  on  foreign  imports  shall  be  sacredly  pledged  for  the  reimbursement 
of  the  loans/  The  loans  were  made.  The  money  was  received,  and  ex 
pended  in  the  establishment  of  her  liberty  and  her  independence.  After 
this,  she  annexed  herself  to  the  United  States,  who  thenceforward  acquired 
the  right  to  the  identical  pledge  which  she  had  made  to  the  public  creditor 
to  satisfy  the  loan  of  money  which  he  had  advanced  to  her.  The  United 
States  became  the  owner  of  that  pledge,  and  the  recipient  of  all  the  duties 
payable  in  the  ports  of  Texas. 

"Now,  sir,  I  do  say  that,  in  my  humble  judgment,  if  there  be  honor, 
or  justice,  or  truth  among  men,  we  do  owe  to  the  creditors  who  thus  ad 
vanced  their  money  upon  that  pledge  the  reimbursement  of  the  money,  at 


THE  FISCAL  HISTORY  OF  TEXAS.  173 

all  events  to  the  extent  that  the  pledged  fund  would  have  reimbursed  it  if 
it  had  never  been  appropriated  by  us  to  our  use.  We  must  recollect,  sir,  in 
relation  to  that  pledge,  and  to  the  loan  made  in  virtue  and  on  the  faith  of  it, 
there  were  three  parties  bound :  the  United  States,  Texas,  and  the  creditor 
of  Texas,  who  had  advanced  his  money  on  the  faith  of  a  solemn  pledge 
made  by  Texas. 

"  Texas  and  the  United  States  might  do  what  they  thought  proper;  but 
in  justice  they  could  do  nothing  to  deprive  the  creditor  of  a  full  reliance 
upon  the  pledge,  upon  the  faith  of  which  he  had  advanced  his  money.  Sir, 
it  is  impossible  now  to  ascertain  how  much  would  have  been  received  from 
that  source  of  revenue  by  the  State  of  Texas  if  she  had  remained  inde 
pendent.  It  would  be  most  unjust  to  go  there  now,  and  examine  at  Gralveston 
and  her  other  ports  to  ascertain  how  much  she  now  receives  by  her  foreign 
imports  ;  because,  by  being  incorporated  into  this  Union,  all  her  supplies, 
which  formerly  were  received  from  foreign  countries,  and  subject,  many  of 
them  at  least,  to  import  duties,  are  now  received  by  the  coasting  trade,  in 
stead  of  being  received  from  other  countries,  as  they  would  have  been  if  she 
had  remained  independent.  Considering  the  extent  'of  her  territory,  and 
the  rapid  manner  in  which  her  population  is  increasing,  and  is  likely  to  in 
crease,  it  is  probable  that,  in  the  course  of  a  few  years,  there  might  have 
been  such  an  amount  received  at  the  various  ports  of  Texas,  she  remaining 
independent,  as  would  have  been  adequate  to  the  extinction  of  the  debt  to 
which  I  have  referred. 

"  But,  sir,  it  is  not  merely  in  the  discharge  of  what  I  consider  to  be  a 
valid  and  legitimate  obligation  resting  upon  the  United  States  to  discharge 
the  specified  duty  ;  it  is  not  upon  that  condition  alone  that  this  payment  is 
proposed  to  be  made;  it  is  also  upon  the  further  condition  that  Texas  shall 
relinquish  to  the  United  States  any  claim  that  she  has  to  any  portion  of 
New  Mexico.  Now,  sir,  although  I  believe  she  has  not  a  valid  title  to  any 
portion  of  New  Mexico,  she  has  a  claim  ;  and  for  the  sake  of  that  general 
quiet  and  harmony — for  the  sake  of  that  accommodation  which  ought  to  be 
as  much  the  object  of  legislation  as  it  is  of  individuals  in  their  transactions 
in  private  life,  we  may  do  now  what  an  individual  in  analogous  circum 
stances  might  do,  give  something  for  the  relinquishment  of  a  claim,  although 
it  should  not  be  well  founded,  for  the  sake  of  peace.  It  is,  therefore,  pro 
posed — and  this  resolution  does  propose — that  we  shall  pay  the  amount  of 
the  debt  contracted  by  Texas  prior  to  its  annexation  to  the  United  States, 
in  consideration  of  our  reception  of  the  duties  applicable  to  the  extinction 
of  that  debt;  and  that  Texas  shall,  also,  in  consideration  of  a  sum  to  be 
advanced,  relinquish  any  claim  which  she  has  to  any  portion  of  New 
Mexico." 

Mr.  Clay  omitted  to  mention  that,  in  the  articles  of  annexation 
(for  so  may  the  joint  resolution  be  called),  Texas  gave  a  guarantee 
that  the  United  States  should  not  be  responsible  for  her  debts. 

lt  In  no  event  are  said  debts  and  liabilities  to  become  a  charge  upon  the 
Government  of  the  United  States." 

It  was,  moreover,  expressly  stipulated  that  all  the  public  lands 


174  THE  FISCAL  HISTORY  OF  TEXAS. 

in  Texas  should  be  applied  to  the  payment  of  her  debts,  and  to  no 
other  purpose,  till  the  whole  should  be  extinguished. 

"  Said  State  shall  retain  all  the  vacant  and  unappropriated  lands  lying 
within  her  limits,  to  be  applied  to  the  payment  of  the  debts  and  other  lia 
bilities  of  said  Republic  of  Texas;  and  the  residue  of  said  lands,  after  dis 
charging  said  debts  and  liabilities,  to  be  disposed  of  as  said  State  may  direct." 

But  Texas  had,  from  inability,  failed  to  make  good  her  guaran 
tee  to  the  United  States  that  in  no  event  should  said  debts  and 
liabilities  become  a  charge  upon  them.  Then  commenced  the  re 
sponsibility  of  the  United  States,  not  to  Texas,  but  the  creditors 
of  Texas.  The  import  duties  of  Texas,  which  had  been  pledged 
to  them,  had  been  transferred  to  the  United  States.  They  peti 
tioned  Congress  for  redress,  and  it  was  plain  that  certain  responsi 
bilities,  to  guard  against  which  express  stipulation  had  been  made 
in  the  articles  of  annexation,  must  come  against  the  United  States, 
unless  Texas  had  increased  means  to  discharge  them.  These  in 
creased  means  could  be  obtained  only  by  a  sale  of  the  public  lands, 
and,  except  the  United  States,  no  purchaser  was  to  be  found. 

It  is  unnecessary  to  trace  this  business  through  the  various 
forms  which  it  assumed  in  the  House  and  the  Senate.  The  bill  for 
passing  all  the  Compromise  Measures  together,  broke  down;  and 
it  was  resolved  to  try  to  pass  them  separately. 

On  the  5th  of  August,  nearly  seven  months  after  Mr.  Benton 
had  brought  the  subject  before  the  Senate,  Mr.  Pearce,  of  Mary 
land,  proposed  what  has  since  been  known  as  the  "  Boundary  Bill." 
It  contained  some  of  the  provisions  of  Mr.  Benton's  bill,  with 
others  intended  to  make  it  acceptable  to  the  parties  concerned. 

In  his  introductory  speech,  Mr.  Pearce,  after  showing  what 
amount  of  land  would  be  ceded  by  Texas,  if  the  bill  were  passed, 
and  the  advantages  that  would  be  derived  therefrom,  proceeded  as 
follows : — 

"  But,  sir,  there  is  another  consideration,  and  it  is  one  to  which  I  have 
been  exceedingly  unwilling  to  give  my  assent,  but  to  which,  nevertheless, 
I  have  been  unable  to  refuse  it.  The  Senate  are  aware  that  the  State  [the 
Republic]  of  Texas  has  incurred,  since  her  independence,  a  considerable 
debt.  They  know,  also,  that  she  has  issued  bonds  to  her  creditors,  in  some  of 
which  the  revenues  from  her  customs  are  specially  pledged  for  the  payment 
of  principal  and  interest.  Upon  the  annexation  of  Texas  to  the  United 
States,  her  right  to  levy  duties  upon  imports  was  surrendered  to  the  Govern 
ment  of  the  United  States;  so  that  source  of  revenue  became  extinct,  or 
fell  into  the  possession  of  the  United  States.  The  revenue  derivable  from 
thus  source  is  not  at  present  large,  but  it  is  likely  to  become  very  large  and 


THE  FISCAL  HISTORY  OF  TEXAS.  175 

valuable  in  future.  I  understand,  from  authorities  on  which  I  can  rely, 
that  the  trade  of  Texas  at  this  time  amounts  to  five  millions  of  dollars  a 
year,  and  that  in  the  city  of  Houston  alone  seven  hundred  and  fifty  thou 
sand  dollars'  worth  of  dutiable  goods  are  consumed  annually.  We  know 
tha^  the  population  is  increasing  with  considerable  rapidity,  and  in  the 
course  of  a  few  years  will  swell  to  such  an  amount  as  would  enable  the  State, 
if  still  in  the  possession  of  the  revenue  derived  from  the  duty  on  imports, 
to  defray  the  interest  on  the  bonds,  and  finally  to  extinguish  them  by  a 
full  payment.  True,  Texas  reserved  to  herself  her  public  lands;  but  it  is 
also  true  that  they  are  at  present  a  very  inadequate  source  of  revenue,  and 
likely  to  continue  so  for  some  time.  When  a  State  pledges  her  revenue, 
it  is  with  an  understanding  that  the  current  expenses  of  the  government 
shall  be  deducted,  because  if  not,  the  government,  unsupported  by  fiscal 
means,  could  not  exist;  anarchy  would  ensue,  and  the  responsibility  and 
obligations  to  the  creditors  would  become  absolutely  valueless.  But,  sir, 
those  creditors  to  whom  the  revenues  of  Texas  were  pledged  for  the  pay 
ment  of  their  bonds  must  undoubtedly  have  relied  upon  that  source  of 
revenue;  they  must  have  looked,  not  to  the  present  productiveness  of  these 
Texan  sources  of  income,  but  to  their  future  productiveness;  and,  although 
they  had  no  legal  right  to  compel  Texas  to  appropriate  the  revenue  derived 
from  that  source  to  the  payment  of  the  bonds,  and  are  utterly  powerless  to 
compel  the  United  States,  yet  the  very  fact  that  they  are  powerless,  that 
they  rest  entirely  upon  moral  force  for  the  performance  of  these  obligations, 
gives  them  a  higher  claim  to  the  equity  and  consideration  of  the  Congress 
of  the  United  States.  I  will  not  liken  it  to  the  case  of  a  mortgage,  because 
I  do  not  suppose  the  operations  of  the  government  can  be  likened  to  a  mort 
gage,  being  things  different  in  their  natures;  but,  so  far  as  there  is  any 
analogy  at  all,  it  is  undoubtedly  in  favor  of  the  case  which  I  now  present. 
The  creditors  of  Texas  had  a  moral  claim,  at  all  events,  upon  the  duties 
on  imports  into  Texas.  These  duties  have  been  taken  by  the  United 
States,  under  the  terms  of  annexation ;  and,  although  there  was  a  special 
stipulation  in  the  joint  resolution  of  annexation  that  these  creditors  should 
not  claim  of  the  United  States  Government  the  payment  of  these  duties, 
yet  it  may  well  be  doubted  whether  that  agreement  between  the  United 
States  and  Texas  can  release  the  United  States  from  its  moral  obligations 
to  the  creditors,  or  whether,  as  these  duties  have  been  specifically  pledged 
by  Texas  for  the  payment  of  these  bonds,  it  is  not  the  duty  of  the  United 
States,  at  all  events,  to  make  some  compensation  to  these  creditors.  Well, 
sir,  this  being  the  case,  I  think  I  am  perfectly  safe  in  saying  that  the  Con 
gress  of  the  United  States  need  never  expect  to  get  rid  of  the  claims  of  these 
creditors  of  Texas  until  they  are  paid.  Considering  the  vast  extent  of 
Texas,  the  large  population  which  must  soon  fill  her  settlements,  that  her 
productive  capacity  will  soon  be  quadrupled,  and  that  her  ability  to  con 
sume  will  keep  pace  with  increasing  production,  we  must  see  that  no  incon 
siderable  tribute  to  our  treasury  will  flow  from  the  customs  duties  on  Texan 
commerce.  It  is  not  a  sufficient  answer  to  say  that  without  annexation 
Texas  would  have  had  no  security,  and  therefore  no  increase  of  commerce, 
for  we  know  that  her  independence  would  have  been  acknowledged  by 
Mexico,  on  the  condition  of  eternal  separation  from  the  United  States;  and 
that  if  this  scheme,  guaranteed  by  England  and  France,  had  gone  into  ope 
ration,  she  would  soon  have  gathered  strength  and  grown  in  prosperity. 


176  THE  FISCAL  HISTORY  OF  TEXAS. 

Besides,  sir,  I  remember  that,  when  we  were  opposing  annexation,  one  promi 
nent  objection  was  that  we  should  come  under  obligations  to  pay  part  of 
her  debt.  One  of  her  bonds  was  exhibited  in  the  Senate,  and  we  were  told 
to  mark  the  pledge  and  heed  the  liability  which  would  devolve  on  us.  All 
these  are  considerations  which  have  weighed  with  me  in  determining  the 
amount  of  ten  millions  allowed  in  the  bill. 

"I  have  been  furnished  with  a  statement  from  the  office  of  the  auditor 
and  comptroller  of  Texas,  which  gives  the  names  of  the  holders  of  all  Texan 
bonds  for  which  the  revenue  from  import  duties  was  specially  pledged,  and 
the  amounts  of  principal  and  interest  respectively  due  to  each,  calculated 
up  to  some  time  in  1848.  The  aggregate  amount  is  $4,045,027  14 ; 
which,  by  this  time,  as  the  interest  is  at  the  rate  of  ten  per  cent,  per 
annum,  must  be  about  four  millions  and  a  half.  If,  to  this  sum,  which 
equity  strongly  calls  on  us  to  allow,  we  add  a  liberal  amount  for  the  terri 
tory  which  Texas  undoubtedly  cedes,  and  allow  also  for  the  territory  which 
she  claims,  and  which  some  think  she  is  justly  entitled  to,  though  I  with 
others  differ  as  to  that,  you  will  have  reached  the  aggregate  amount  of  the 
ten  millions  which  is  proposed  to  be  paid  in  the  bill.  I  am  aware  that  this 
will  be  considered  extravagant,  especially  after  the  expensive  war  in  which 
we  have  been  engaged,  and  more  especially  when  we  consider  the  fifteen 
millions  to  be  paid  for  the  cession,  as  many  think,  and  as  I  think,  of  part 
of  this  very  territory  ;  still,  taking  all  these  considerations  together,  I  think 
a  fair  case  is  made  out,  in  which  every  Senator  could  justify  himself  to  his 
conscience  for  allowing  the  sum  proposed." 

Mr.  Pearce  then  dilated  on  the  advantages  which  would  arise 
in  settling  the  boundary  line  between  New  Mexico  and  Texas  in 
restoring  peace  and  harmony  to  the  country,  after  which  he  pro 
ceeded  as  follows : — 

"  There  is  another  subject  to  which  I  must  ask  the  attention  of  the 
Senate  for  a  few  moments,  and  that  is,  the  proviso  attached  to  the  last 
clause  of  the  bill.  It  has  been  proposed  by  some  that  the  United  States 
should  reserve  to  itself  the  right  of  distributing  the  money  we  may  vote  to 
Texas  among  her  creditors ;  but  I  have  put  no  such  provision  as  that  into 
the  bill,  and  for  several  reasons.  In  the  first  place,  I  do  not  wish  the 
United  States  to  become  a  commissioner  in  bankruptcy  for  Texas ;  and,  in 
the  second,  I  do  not  wish  to  place  Texas  in  the  condition  of  appearing  to 
be  obliged  to  be  placed  in  the  hands  of  a  commissioner  of  bankruptcy.  It 
seems  to  me  that,  while  it  would  have  been  impolitic  in  us  to  undertake 
that  which  we  have  not  the  means  of  doing  properly,  Texas  can,  with  safety 
to  her  creditors  and  honor  to  herself,  make  this  distribution.  It  would  also 
be  an  indignity  to  the  State  of  Texas.  Sir,  one  of  the  highest  affronts  that 
could  be  offered  to  an  honest  man  would  be  to  say,  when  he  has  ample 
means  to  discharge  his  debts,  that  you  suspect  his  honor,  and  will  not  trust 
him  with  the  money  devoted  to  this  purpose.  It  is  quite  as  offensive,  un 
doubtedly,  to  a  State,  to  suppose  that  she  will  be  faithless  and  fraudulent 
in*a  settlement  with  her  creditors.  I  am  not  willing  to  make  such  an  im 
putation  on  Texas,  to  suspect  in  the  least  her  honor,  or  the  honor  of  her 
Legislature.  I  am  willing  to  submit  the  matter  to  her  decision,  and  to  let 
her  settle  with  her  creditors  with  the  means  which  we  have  provided  her. 


THE  FISCAL  HISTORY  OF  TEXAS.  177 

But  I  admit,  at  the  same  time,  that  it  is  right  to  guard  the  treasury  of  the 
United  States  from  the  contingencies  which  may  flow  from  this  measure,  if 
Texas  should  not  adopt  this  course,  or  if  Texas  were  to  settle  with  her 
creditors,  not  in  full,  but  upon  a  reduction  of  their  claims  for  principal  and 
interest  due  them,  even  with  their  assent.  It  is  possible  that,  at  some 
future  time,  these  creditors,  even  after  having  consented  to  take  seventy-five 
cents  in  the  dollar,  if  that  can  be  supposed,  may  come  back  on  the  Govern 
ment  of  the  United  States,  and  demand  the  full  amount.  I  propose  to 
guard  against  that,  and  for  that  purpose  I  have  introduced  the  last  proviso 
in  the  bill.  It  provides  that,  of  the  ten  millions  of  five  per  cent,  stock  to 
be  issued  after  the  State  of  Texas  shall  have  assented  to  these  terms,  and 
signified  her  assent  in  proper  form  to  the  Government  of  the  United  States, 
we  shall  retain  five  millions  until  such  a  time  as  a  full  release  shall  be  filed, 
in  the  treasury  of  the  United  States,  by  the  creditors  holding  those  bonds 
for  which  the  duties  on  the  customs  are  pledged.  The  arrangement  ren 
dered  necessary  by  this  proviso  may  easily  be  effected  by  these  creditors 
and  Texas.  On  the  presentation  of  these  claims  (and  I  believe  they  all 
have  been  presented  under  the  act  of  the  Legislature  of  1848,  which  called 
upon  the  creditors  to  exhibit  their  claims),  the  amount  of  which  is  furnished 
in  the  statement  I  referred  to,  not  long  ago,  to  the  treasury  of  Texas,  it  is 
perfectly  competent  for  Texas  to  give  them  orders  for  stock  on  the  treasury 
of  the  United  States,  for  the  amount  to  which  they  may  be  entitled,  by  any 
arrangement  which  may  be  agreed  upon  between  them.  And  these  orders, 
being  filed  in  the  treasury,  will  be  ample  security  to  the  United  States,  and 
protect  us  from  the  possible  demands  to  which  I  have  referred.  The  neces 
sary  details  can  be  prescribed  by  the  authority  of  the  Treasury  Department." 

The  remarks  of  Mr.  Pearce,  taken  in  connection  with  those  of 
Mr.  Clay,  give  a  very  clear  view  of  the  relations  subsisting  between 
the  Government  of  the  United  States  and  the  creditors  of  Texas. 

In  the  House  of  Representatives,  on  the  10th  of  August,  Mr. 
Moore,  of  Pennsylvania,  made  a  speech,  in  which  he  said : — 

"  And  here  let  me  also  say  that,  while  I  may,  perhaps,  be  willing  to  vote 
for  a  reasonable  sum  to  Texas  in  the  settlement  of  this  question,  not  one 
dollar  of  it  would  I  vote  as  a  remuneration  for  the  territory  which  she  thus 
claims ;  but  because  I  feel  that,  having  annexed  that  State  to  this  Union, 
and  taken  all  her  means  of  revenue,  we  are,  in  a  measure,  at  least  equitably, 
if  not  legally,  responsible  for  the  debts  due  from  her  at  that  tiine;  and  for 
the  liquidation  of  which  debts  these  revenues  were  pledged/' 

Such,  judging  from  the  published  reports  of  the  debates,  was 
the  general  feeling  in  Congress.  If  a  direct  vote  could  have  been 
taken  on  the  claim  set  up  by  Texas  to  the  eastern  half  of  New 
Mexico,  and  that  claim  could  have  been  presented  divested  of  all 
other  considerations,  very  few  members  would  have  sustained  it. 
But,  in  the  excited  state  of  the  public  mind,  a  direct  vote  on  this 
question  was  very  judiciously  avoided,  by  including  in  the  bill  a 
portion  of  territory  to  which  Texas  had  an  undoubted  right.  But, 
12 


178  THE  FISCAL  HISTORY  OF  TEXAS. 

if  Texas  had  remained  without  the  Union,  Congress  never  would 
have  settled  with  her  on  these  terms.  By  conquest  and  by  pur 
chase,  the  United  States  came  into  possession  of  all  the  rights  in 
New  Mexico  which  Mexico  had  previously  enjoyed.  In  settling 
the  boundaries  of  that  province  with  a  foreign  power,  Congress 
would  never  have  given  five  million  dollars,  nor  one  million  dollars, 
nor  one  million  cents,  for  the  relinquishment  of  such  a  claim  as 
Texas  asserted.  But  settling  the  business  with  Texas,  she  having 
come  into  the  Union,  was  a  family  matter ;  and  family  considera 
tions  alone  led  to  the  adjustment  finally  agreed  upon. 

As  little  disposed  would  Congress  have  been  to  give  five  million 
dollars,  or  one  million  dollars,  or  even  one  dollar,  for  the  land 
which  was  undoubtedly  Texas's,  but  for  the  sake  of  enabling 
Texas  to  pay  her  debts,  and  thereby  release  the  United  States 
from  all  responsibilities  to  the  old  creditors  of  Texas. 

August  9th,  the  bill  was  ordered  to  be  engrossed  for  a  third 
reading  by  a  vote  of  27  ayes  to  24  noes,  and  was  afterwards,  on 
the  same  day,  passed  by  a  vote  of  30  to  20. 

It  was  then  sent  to  the  House,  where  it  was,  September  4, 
ordered  to  be  engrossed  for  a  third  reading  by  a  vote  of  108  to 
98,  and  passed  on  the  same  day  by  a  vote  of  108  to  97. 

We  thus  find  that,  notwithstanding  the  many  influences  that 
were  brought  to  bear  in  its  favor,  it  was  by  no  great  majority  that 
the  bill  passed  the  two  Houses. 


THE  FISCAL  HISTORY  OF  TEXAS.  179 


CHAPTER    XXVII. 

PROCEEDINGS  OF  THE  LEGISLATURE  OF  TEXAS  AT  ITS  SPECIAL  SES 
SION,  NOVEMBER,  1850,  AND  AT  ITS  REGULAR  SESSION,  NOVEMBER, 
1851. 

The  conditions  of  the  "  Boundary  Bill"  formally  accepted — Proud  position  of  Texas 
— Different  constructions  of  some  provisions  of  the  "Boundary  Bill" — Extracts 
from  Governor  Bell's  message,  with  remarks  on  the  same — Bill  reported  "  to  require 
the  creditors  to  sign  releases  to  the  United  States" — The  money  received  applied 
to  other  objects  than  to  the  payment  of  the  debts  for  which  the  United  States 
were  liable. 

THE  "Boundary  Act"  was  signed  by  the  President  on  the  7th  of 
September.  A  special  session  of  the  Legislature  of  Texas  was 
held  at  Austin,  and,  on  the  25th  of  November,  a  law  was  passed 
accepting  the  propositions  made  by  the  United  States. 

This  law,  after  reciting  the  provisions  of  the  act  of  Congress, 
enacts  and  declares  as  follows  : — 

"  Therefore,  first :  Be  it  enacted  ~by  the  Legislature  of  the  State  of  Texas, 
That  the  State  of  Texas  hereby  agrees  to  and  accepts  said  propositions ; 
and  it  is  hereby  declared  that  the  State  shall  be  bound  by  the  terms  there 
of,  according  to  their  true  import  and  meaning. 

"  Second :  That  the  Governor  of  this  State  be,  and  he  is  hereby  re 
quested  to  cause  a  copy  of  this  act,  authenticated  under  the  seal  of  the 
State,  to  be  furnished  to  the  President  of  the  United  States,  by  mail,  as 
early  as  practicable ;  and  also  a  copy  thereof,  certified  in  like  manner,  to 
be  transmitted  to  each  of  the  Senators  and  Representatives  of  Texas  in  Con 
gress,  and  that  this  act  take  effect  from  and  after  its  passage." 

In  communicating  this  intelligence  to  the  Senate,  President 
Fillmore  said  : — 

"  From  the  common  sources  of  public  information,  it  would  appear  that 
a  very  remarkable  degree  of  unanimity  prevailed,  not  only  in  the  Legisla 
ture,  but  among  the  people  of  Texas,  in  respect  to  the  agreement  of  the 
State  to  that  which  had  been  proposed  in  Congress." 

Texas  now  stood  in  a  proud  position.  She  had  succeeded  in  the 
object  she  had  so  long  had  in  view;  a  sale  to  Congress  of  land 
which  was  of  no  use  to  her  as  a  State.  As  General  Houston  after- 


180  THE  FISCAL  HISTORY  OF  TEXAS. 

wards  said,  in  an  address  to  the  people  of  Galveston,  "it  was  the 
best  sale  ever  made  of  land  of  a  worthless  quality,  and  a  disputa 
ble  title."  Texas  was  now  rich.  She  had  the  means  of  paying 
her  creditors  in  full.  Whether  Texas,  in  the  days  of  her  riches, 
repudiated  the  scaling  system  she  had  adopted  in  the  days  of  her 
poverty,  will  be  seen  as  we  proceed. 

It  was  not  long  before  the  authorities  of  Texas  and  those  of  the 
United  States  disagreed  as  to  the  amount  of  debts  which  the  re 
served  five  millions  in  bonds  were  intended  to  cover.  The  acting 
Attorney-General  of  Texas  maintained  that  the  only  debts  of  the 
Republic  for  which  duties  on  imports  had  been  "specially  pledged," 
were  those  where,  in  the  laws  authorizing  such  debts,  said  duties 
were  expressly  mentioned  by  name,  distinctively  from  all  others. 
There  had  been  no  such  pledge,  he  averred,  except  in  regard  to 
the  interest  which  had  accrued  on  "  the  consolidated  fund"  issued 
under  the  act  of  the  Texan  Congress,  approved  January  7,  1837. 
This  amounted  to  a  fraction  over  six  hundred  thousand  dollars. 
And  he  contended  that,  as  soon  as  the  claimants  had  signed  releases 
to  this  amount,  the  United  States  were  bound  to  surrender  to  Texas 
the  residue  of  the  five  millions.  The  Texan  authorities,  generally, 
concurred  in  these  views. 

On  the  other  hand,  the  authorities  of  the  United  States  main 
tained  that  the  genus  could  not  be  pledged  without  pledging  all 
the  species  it  included,  and  that,  therefore,  whenever  the  Republic 
of  Texas  had  made  a  special  pledge  of  her  revenues,  she  had  made 
a  special  pledge  of  the  duties  on  imports  as  a  part  of  these  reve 
nues.  Thus,  instead  of  pledging  her  customs  for  debts  of  the 
amount  of  only  six  hundred  thousand  dollars,  as  asserted  by  her 
acting  Attorney-General,  Texas  had  pledged  them  for  debts 
amounting  to  at  least  six  millions,  probably  eight,  perhaps  even 
more,  at  the  unsealed  rates.  To  determine  the  exact  amount, 
more  particular  information  was  requisite  in  regard  to  certain 
branches  of  the  debt. 

Very  soon  after  the  "  Boundary  Act"  was  passed,  the  Texan  dele 
gation  in  Congress  addressed  a  letter  to  the  Secretary  of  the  Trea 
sury,  in  which  they  supported  the  construction  given  to  the  law  by 
the  acting  Attorney-General  of  their  State,  thus  maintaining  that 
only  six  hundred  thousand  dollars  of  the  debts  of  Texas  were 
covered  by  the  pledge  of  the  duties  on  imports.  This  was  a  very 


THE  FISCAL  HISTORY  OF  TEXAS.  181 

different  view  of  the  subject  from  that  given  by  Mr.  Pearce  when 
he  introduced  the  "  Boundary  Bill."     He  then  said — 

"  T  have  been  furnished  with  a  statement  from  the  office  of  the  auditor 
and  comptroller  of  Texas,  which  gives  the  names  of  the  holders  of  all 
Texan  bonds  for  which  the  revenue  from  import  duties  was  specially  pledged ; 
and  the  amount  of  principal  and  interest  respectively  due  to  each,  calculated 
up  to  some  time  in  1848.  The  aggregate  amount  is  $4,045,027  14,  which, 
by  this  time,  as  the  interest  is  at  the  rate  of  ten  per  cent,  per  annum,  must 
be  about  four  millions  and  a  half." 

This  statement  does  not  appear  to  have  been  controverted  by 
the  Texan  members  either  in  the  Senate  or  the  House,  and  with 
this  understanding  of  the  amount  of  debt  for  which  the  customs 
were  pledged,  Congress  ordered  the  five  millions  in  bonds  to  be 
retained  till  the  creditors  should  sign  releases  to  the  United  States. 

The  views  of  the  Federal  authorities  are  clearly  set  forth  in  the 
report  of  the  Secretary  of  the  Treasury,  Mr.  Corwin,  to  the  Pre 
sident.  We  give  it  at  length  in  Appendix  T,  as  it  will  not  admit 
of  abridgment. 

The  views  of  the  authorities  of  Texas  will  be  seen  in  the  follow 
ing  extracts  from  a  message  which  Governor  Bell  sent  to  the 
Legislature  of  that  State,  November  10,  1851. 

"  The  Republic  of  Texas  having  executed  her  bonds  and  other  evidences 
of  debt  in  an  exceedingly  dark  and  gloomy  period  of  her  history,  it  became 
necessary  to  issue  them  for  nominal  amounts,  bearing  no  sort  of  proportion 
to  the  amount  actually  received;  and  to  pledge  her  resources,  arising 
mainly,  at  that  time,  from  her  revenues,  for  their  redemption." 

In  this  respect,  the  history  of  Texas  is  like  that  of  other  govern 
ments.  Alexander  Hamilton,  in  his  report  as  Secretary  of  the 
Treasury,  with  his  plan  for  supporting  public  credit,  says:  "  When 
the  credit  of  a  country  is  in  any  degree  questionable,  it  never  fails 
to  give  an  extravagant  premium,  in  one  shape  or  another,  upon  all 
the  loans  it  has  occasion  to  make."  Every  person  who  knows 
anything  about  debt  and  credit  knows  it  necessarily  must  be  so. 
But  this  is  the  first  time,  we  believe,  in  the  world's  history,  when 
the  necessity  a  government  is  under,  "in  an  exceedingly  dark  and 
gloomy  period,"  of  making  large  promises,  is  used  as  a  reason  for 
not  fulfilling  those  promises  in  time  of  prosperity. 

But,  the  Governor  continues  : — 

"These  securities,  generally  speaking,  were  concentrated  at  very  low 
rates,  in  the  hands  of  moneyed  speculators,  who  had  contributed  nothing  to 
the  achievement  of  her  independence,  or  to  the  relief  of  her  actual  necessi 
ties  in  the  administration  of  the  government  at  the  time  they  were  issued." 


182  THE  FISCAL  HISTORY  OF  TEXAS. 

Admit  all  this  to  be  so,  and  it  does  not  in  the  least  diminish  the 
obligation  of  the  government  of  Texas  to  pay  its  debts.  The  evi 
dences  of  debt  it  issued  owed  great  part  of  their  value  to  their 
transferability.  The  original  claimants  transferred  the  whole  of 
their  rights  to  others.  If  they  got  but  little  for  them,  that  was 
their  misfortune.  And  if  they  were  then  worth  but  little,  the  fault 
was  in  the  mismanagement  and  extravagance  of  the  government 
of  Texas.  It  is  well,  indeed,  for  a  government  to  reduce  the  mar 
ket  value  of  its  own  securities  by  its  own  folly,  and  then  give  this 
as  a  reason  wrhy  they  should  not  be  redeemed  according  to 
contract. 

"  This  consideration,  well  understood  and  appreciated,  induced  an  in 
quiry  in  respect  to  the  mode  of  redeeming  these  securities;  as  no  one  could 
entertain  the  opinion,  for  a  moment,  that  the  government  was  under  any 
obligation,  either  in  justice  or  in  morality,  to  redeem  them  by  paying  the 
amount  expressed  on  their  face;  and  that  inquiry  resulted  in  the  passage 
of  the  act  of  the  State  Legislature  of  March  20th,  1848,  u  to  provide  for 
ascertaining  the  debt  of  the  late  Republic  of  Texas,"  which  act  required 
the  auditor  and  comptroller  of  the  State  to  reduce  all  claims  presented  for 
liquidation  to  the  actual  par  value  which  was  realized  by  the  Republic  at 
the  time  of  their  issue.  The  evident  meaning  and  contemplation  of  that 
act  was,  that  the  holders  of  the  claims  should  be  paid  in  accordance  with 
the  amount  thus  ascertained  by  the  auditorial  board,  subject  to  the  revision 
of  the  Legislature;  and  the  amounts  so  ascertained  were  considered  as  all 
that  was  actually  due  from  the  State  to  her  several  creditors.  That  the 
Legislature  had  the  right  to  pass  this  law,  there  can  be  no  question,  and 
that  the  individuals  holding  the  bonds  or  other  evidences  of  debt  against 
the  late  Republic,  were  bound  by  it,  there  can  be  as  little." 

No  one  who  knows  Governor  Bell  will  doubt  his  disposition  to 
do  what  he  believes  to  be  right;  and  his  entertaining  such  notions 
is  only  evidence  of  the  extent  to  which,  in  some  circumstances,  an 
honest  man's  judgment  may  be  perverted.  There  was  a  case  of 
debtor  and  creditor.  The  creditor  was  absent,  and  his  cause  was 
feebly  pleaded,  if  pleaded  at  all.  The  debtor  was  the  sole  judge, 
pleaded  his  own  cause  fully,  and,  as  might  have  been  expected, 
gave  judgment  in  his  own  favor. 

This  was  the  precise  case  of  Texas  and  her  creditors.  And 
from  the  one-sided  view  her  citizens  took  from  the  beginning,  and 
from  their  entertaining  it  uninterruptedly  for  several  years  in  suc 
cession,  they  at  length  came  to  the  conclusion  that  their  decision 
was  incontrovertible.  A  State  may  heap  pledge  upon  pledge — 
pledge  its  public  lands,  its  direct  taxes,  its  license  taxes,  its  cus- 


THE  FISCAL  HISTORY  OF  TEXAS.  183 

toms,  and,  lastly,  its  public  faith,  and  thus  everything  it  possesses, 
or  may  hereafter  possess.  But  if  it  makes  these  pledges  "  in  an 
exceedingly  dark  and  gloomy  period  of  its  history,  no  one  can 
entertain  the  opinion  for  a  moment"  that  it  is  bound  by  them  in 
periods  of  prosperity.  Such  a  government  is  under  "no  obliga 
tion,  either  in  justice  or  morality,  to  redeem  its  securities  by  pay 
ing  the  amount  expressed  on  their  face."  It  may  enter  into  con 
tracts  each  as  binding  as  if  the  great  seal  of  the  Republic  had  been 
attached  to  it,  and  it  may  cut  down  those  contracts  to  one-half, 
one-third,  or  even  the  fifth  of  the  original  amount.  As  the  debtor 
party  is  a  sovereign  State,  there  can  be  no  question  that  it  has  a 
right  to  do  this ;  and  there  is  as  little  question  that  the  creditor 
party,  consisting  of  mere  individuals,  are  bound  by  it ! 

Governor  Bell  seemed,  however,  to  have  his  doubts  whether  this 
view  of  the  case  would  be  as  satisfactory  to  the  authorities  of  the 
United  States  as  it  was  to  himself  and  the  great  body  of  his  con 
stituents. 

"  It  occurred  to  me,  therefore,  after  a  careful  examination  of  the  proviso, 
that  difficulties  and  embarrassments  would  be  produced  in  the  settlement 
of  our  outstanding  liabilities,  unless  the  Secretary  of  the  Treasury  should 
give  such  a  construction  of  the  law  on  the  subject  as  would  enable  the  State 
of  Texas  to  define  who  were  the  creditors  therein  referred  to,  and  also  to 
ascertain  the  amount  of  the  liabilities  of  the  State,  which  this  reserved  five 
millions  of  dollars  was  intended  to  cover.  By  the  phraseology  of  the  act, 
the  decision  of  the  question  as  to  who  were  the  creditors  of  the  State,  hold 
ing  claims  on  which  duties  for  imports  (  were  specially  pledged ;'  and  the 
amount  of  these  claims,  was  referred  directly  to  the  Secretary  of  the  Trea 
sury  of  the  United  States;  and  as  he  could  have  no  means  of  ascertaining 
these  facts,  except  such  as  were  derived  from  the  State,  through  her  proper 
officers,  I  deemed  it  my  duty  to  dispatch  an  officer  to  the  city  of  Washing 
ton,  charged  with  instructions  to  ascertain  what  course  he  intended  to  pur 
sue  in  reference  to  this  matter." 

Governor  Bell  was  unquestionably  right  in  supposing  that  diffi 
culties  and  embarrassments  would  ensue,  if  Texas  persisted  in  her 
scaling  system.  The  possibility  of  this  was  mentioned  by  Mr. 
Pearce  as  one  of  the  reasons  for  retaining  bonds  to  the  amount  of 
five  millions  in  the  United  States  Treasury.  His  language  was : — 

"  I  am  not  willing  to  make  any  such  imputation  on  Texas,  to  suspect  in 
the  least  her  honor,  or  the  honor  of  her  Legislature.  I  am  willing  to  sub 
mit  the  matter  to  her  decision,  and  let  her  settle  with  her  creditors  with  the 
means  which  we  have  provided  for.  But  I  admit,  at  the  same  time,  that  it 
is  right  to  guard  the  Treasury  of  the  United  States  from  the  contingencies 
which  may  flow  from  this  measure,  if  Texas  should  not  adopt  this  course, 


184  THE  FISCAL  HISTORY  OF  TEXAS. 

or  if  Texas  were  to  settle  with  her  creditors  not  in  full,  but  upon  a  reduction 
of  their  claims  for  principal  and  interest  due  to  them,  even  with  their  assent. 
It  is  possible  that,  at  some  future  time,  these  creditors,  even  after  having 
consented  to  take  seventy-five  cents  in  the  dollar,  if  that  can  be  supposed, 
may  come  back  on  the  Government  of  the  United  States  and  demand  the 
full  amount.  I  propose  to  guard  against  that,  and  FOR  THAT  PURPOSE  I 
have  introduced  the  last  proviso  in  the  bill." 

Some  of  the  Texans  have  expressed  great  indignation  because 
the  United  States  authorities  will  not  give  up  the  five  millions ; 
thereby,  as  they  conceive,  keeping  them  out  of  their  rights.  They 
may  here  see  the  reason  of  it.  Scaling  debts  is  not  paying  them. 
Unless  Texas  makes  full  satisfaction  to  a  certain  class  of  her 
creditors,  they,  according  to  the  laws  of  nations  and  the  principles 
of  equity,  become  creditors  of  the  United  States.  The  United 
States  are  not  willing  to  pay  the  same  debts  twice,  and  therefore 
holds  on  to  the  bonds,  to  the  amount  of  five  millions,  till  all  the 
releases  shall  be  signed. 

A  little  further  on,  the  Governor  makes  the  following  remarks: — 

"  By  adverting  to  the  letter  of  the  Secretary  of  the  Treasury,  under  date 
of  February  12,  1851,  it  will  be  perceived  that  he  has  decided  not  to  issue 
to  the  State,  under  any  circumstances,  stock  for  any  portion  of  the  retained 
five  millions  of  dollars,  until  all  the  creditors  holding  obligations,  for  the 
payment  of  which  duties  on  imports  were  specially  pledged,  shall  have  re 
linquished  to  the  United  States  their  claims,  notwithstanding  it  may  be 
ascertained  prior  to  such  relinquishment  that  a  very  inconsiderable  part  of 
that  five  millions  will  be  required  to  cover  those  claims  ]  and  that  he  has 
reserved  to  himself  the  right  of  deciding,  from  data  to  be  furnished  by  the 
State,  the  amount  of  the  claims  now  outstanding,  for  which  duties  on  im 
ports  were  specially  pledged,  and  also  the  individuals  entitled  to  receive 
these  amounts." 

The  Secretary  of  the  Treasury  takes  a  very  different  view  of 
the  case.  His  inquiries  have  led  him  to  believe  that  the  customs 
of  Texas  were  pledged  for  all  the  debts  contained  in  Schedules  A, 
B,  D,  and  part  of  E,  viz. : — 

Original  claims.  Reduced  amount. 

"Schedule  A,       .         .         .      $1,651,59002  $1,164,482 

B,       .         .         .        2,582,902  70  1,651,200 

"        D,       .         .         .        1,472,918  90  294,581 

Part  of     E,                .         .           509,000  00  289,000 


$6,216,411  62  $3,399,263 
And  it  may  be — 

Residue  of  E,     .         .         .         2,077,54600  517,386 

And  part  of  F,  .         .         .         2,181,94500  2,177,181" 


THE  FISCAL  HISTORY  OF  TEXAS.  185 

There  seems,  therefore,  little  probability  that  only  a  "  very 
inconsiderable  part  of  that  five  millions  will  be  wanted  to  cover 
those  claims." 

"  From  the  opinions  of  the  acting  Attorney-General  of  the  State,  under 
date  of  September  8, 1850,  it  would  seem  that  the  payment  of  a  very  small 
portion  of  the  public  debt  now  outstanding  was  secured  by  '  a  special 
pledge'  of  import  duties,  probably  not  exceeding  six  hundred  thousand 
dollars  ;  and  yet,  according  to  the  decision  of  the  Secretary  of  the  Treasury, 
the  whole  five  millions  must  be  retained  in  the  treasury  of  the  United 
States  until  every  individual  creditor  owning  any  part  of  that  six  hundred 
thousand  dollars,  however  small,  shall  have  filed  his  relinquishmeut  to  the 
United  States  in  the  Treasury  Department  at  Washington." 

The  acting  Attorney-General-  of  Texas  was  counsel  for  a  party 
that  had  an  interest  in  causing  as  little  as  possible  to  be  paid  to 
its  creditors,  that  thereby  as  much  as  possible  might  be  paid  to 
itself,  and  he  endeavored  to  do  the  best  he  could  for  his  client. 
Hence  his  ingenious  interpretation  that,  when  a  State  made  a 
special  pledge  of  the  whole  of  its  revenues,  that  was  not  a  special 
pledge  of  all  its  parts.  But,  admitting  his  construction  to  be  cor 
rect,  as  but  few  of  the  claimants  of  the  single  class  he  supposes 
are  alone  entitled  to  the  benefit  of  this  provision  of  the  act  have 
signed  the  releases,  the  Secretary  of  the  Treasury  has  no  authority 
to  surrender  the  bonds. 

"A  decision  which  would  lead  to  such  consequences  cannot  be  in  ac 
cordance  with  the  spirit  and  intention  of  the  compact  between  the  Federal 
Government  and  Texas,  although  it  may  be  within  the  strict  letter  of  the 
law;  and  it  has  occurred  to  me  that  some  further  action  by  the  General 
Congress  is  necessary  to  place  this  subject  in  its  proper  light;  and  it  will  be 
proper  for  the  State  Legislature  to  indicate,  by  resolution  or  otherwise,  as  it 
may  deem  best,  what  that  action  may  be." 

This  provision  of  the  law  is  too  clear  to  admit  of  dispute,  and 
the  spirit  of  it  is  in  exact  accordance  with  the  letter.  It  was  voted 
for  by  all  the  delegates  of  Texas  in  Congress.  It  was  fully  and 
freely  assented  to  by  the  Legislature  of  Texas  in  its  act  of  Novem 
ber  25,  1850.  It  forms  part  of  the  compact  between  the  United 
States  and  Texas,  as  set  forth  in  the  "Boundary  Bill,"  and  it 
ought  not  to  be  changed  without  a  sufficient  reason. 

"  If  the  decision  of  the  Secretary  of  the  Treasury  remains  unchanged 
(and  we  have  no  reason  to  expect  a  change  in  it,  without  an  alteration  of 
the  law),  the  State  may  be  kept  for  an  indefinite,  probably  an  interminable, 
period  out  of  nearly  one-half  of  the  pecuniary  consideration  for  which  she 
relinquished  a  large  portion  of  her  territory;  and  this  result  may  be  pro- 


186  THE  FISCAL  HISTORY  OF  TEXAS. 

duced  by  some  obstinate  and  perverse  creditor  who,  holding  an  amount  not 
sufficient  in  importance  to  embarrass  his  own  operations,  may,  by  this  means, 
seek  to  embarrass  the  interests  of  all  others,  by  withholding  a  relinquish- 
ment  of  his  claim  to  the  United  States." 

Nothing  like  this  has  occurred,  nor  is  it  likely  to  occur.  If  it 
should,  Congress  will,  no  doubt,  interfere. 

<(  This  difficulty  may,  perhaps,  be  obviated  in  the  following  manner :  If 
the  General  Congress  will  so  modify  the  act  of  September  9,  1850,  as  to 
authorize  the  Secretary  of  the  Treasury  to  issue  stock  to  the  State  of  Texas 
for  the  whole  amount  of  the  retained  five  millions,  upon  the  State,  through 
her  proper  officers,  filing  at  the  Treasury  Department  a  release  and  full  ex 
oneration  of  the  Federal  Government  from  all  liability  for  any  portion  of 
the  public  debt  of  Texas,  growing  out  of  the  transfer,  by  the  act  of  annexa 
tion,  of  the  resources  arising  from  duties  on  imports,  all  difficulty  would  at 
once  be  removed,  and  the  public  debt  could,  without  further  delay,  be  placed 
in  a  train  of  proper  adjustment,  through  the  agency  of  our  own  officers,  by 
whom  it  must  be  ultimately  settled." 

The  liability  of  the  United  States  is  not  to  Texas,  but  to  the 
creditors  of  Texas.  Any  release  signed  by  the  authorities  of  Texas 
would  amount  to  nothing.  Besides  this,  Texas,  in  the  articles  of 
annexation,  entered  into  an  engagement  that  "in  no  event  should" 
these  very  debts  "  become  a  charge  against  the  United  States." 
As  she  has  failed  to  fulfil  this  engagement,  it  is  hardly  to  be  ex 
pected  that  the  United  States  will  enter  into  another  with  her  in 
relation  to  the  same  subject. 

11  To  such  a  modification  of  the  law,  the  Executive  cannot  perceive  that 
any  well-founded  objection  could  be  urged.  The  obligation  to  pay  these 
debts  rests  entirely  upon  the  State;  and  although  the  creditors,  at  the 
time  they  were  incurred,  may  have  had  a  view  to  the  supposed  and  proba 
ble  resources  of  the  Republic  for  their  payment,  still  they  did  not  anticipate 
that  those  resources  were  to  be  applied  by  any  other  than  the  government 
with  whom  the  contracts  were  made,  and  with  whom  necessarily  remained 
the  right  to  modify  or  change  them,  as  it  might  deem  best.  Had  the 
government,  after  these  contracts  were  made,  deemed  that  the  interests  of 
the  citizens,  or  prosperity  of  the  country,  required  her  to  reduce  her  duties 
on  imports  to  a  mere  nominal  amount,  or  to  have  taken  them  off  altogether, 
and  thrown  her  ports  open  to  the  free  commerce  of  the  world,  no  one  would 
have  questioned  for  a  moment  her  right  to  have  done  so ;  and  her  creditors 
would  have  had  no  just  cause  of  complaint  of  such  an  act,  because  they 
made  their  contract  with  the  full  knowledge  that  such  a  right  existed,  and 
would,  to  some  extent  at  least,  be  exercised.  Indeed,  it  was  exercised  every 
year,  in  the  various  modifications  of  the  tariff  laws  of  the  late  Republic; 
and,  in  1842,  upon  the  adoption  of  what  was  known  as  the  Exchequer  Sys 
tem,  they  underwent  an  almost  radical  change  (a  change  which  reduced 
the  duties  laid  upon  imports  from  a  very  large  to  a  comparatively  small 
amount);  and  yet  no  one  then  asserted  that  this  change  in  the  amount  of 


THE  FISCAL  HISTORY  OF  TEXAS.  187 

duties  to  be  collected  was  a  violation  of  the  previous  contract  entered  into 
with  these  creditors." 

A  sovereign  State  may  do  a  great  many  bad  things :  and  Texas 
is  not  the  only  State  that  affords  examples  of  this  truth.  Should 
a  State,  however,  after  borrowing  money  on  the  pledge  of  a  par 
ticular  branch  of  revenue,  afterwards  abolish  that  revenue,  it 
would  be  bound,  by  regard  to  public  honor  and  public  faith,  to 
make  good  the  deficit  from  some  other  source.  Mere  variations 
may  be  made  in  the  amount  of  taxes  levied,  and  the  manner  of 
levying  them,  without  any  breach  of  faith.  Such  variations  occur 
in  all  governments,  and  if  they  were  more  frequent  in  Texas  than 
elsewhere,  it  was  owing  to  the  unsettled  condition  of  her  affairs 
during  the  whole  period  of  her  revolutionary  history.  The  change 
made  by  the  Exchequer  System  made  only  a  nominal  reduction  in 
the  revenue  from  imports.  The  specie  value  exceeded  that  of  the 
revenue  in  the  years  in  which  treasury  notes  were  received. 

"  The  transfer  by  Texas  of  a  portion  of  her  sovereignty  to  the  United 
States,  and  by  which  her  right  to  collect  duties  on  imports  was  given  up, 
in  its  consequences  was  nothing  more  than  would  have  resulted  from  a 
repeal  of  her  own  laws  imposing  such  duties;  and  the  Federal  Government, 
by  receiving  that  transfer,  incurred  no  other  obligation,  in  respect  to  the 
debts  of  Texas,  than  an  equitable  one  to  give  the  State  such  an  equivalent 
for  the  loss  of  her  revenues  arising  from  import  duties  as  would  enable  her 
to  carry  out  her  contracts  with  her  creditors  as  effectually  as  she  might 
have  done  had  her  revenues  from  imports  not  been  surrendered;  but  that 
government  incurred  no  other  obligation  whatever  to  the  creditor  individu 
ally;  and  the  assumption  of  such  an  obligation  was  a  gratuitous  act,  by 
which  the  State  of  Texas  ought  not,  in  any  sense,  to  be  bound.  The  debt 
is  one  which  Texas  owes,  and  which  Texas  has  to  pay;  and  no  power  can 
rightfully  interpose  between  her  and  her  creditors,  and  dictate  the  manner 
of  its  settlement." 

The  United  States  do  not  interpose  between  Texas  and  her 
creditors.  Each  and  every  one  of  them  is  at  liberty  to  accept  the 
composition  Texas  offers.  But,  then,  in  addition  to  the  release  he 
signs  to  Texas,  he  must  sign  a  release  to  the  United  States,  if  the 
revenue  from  imports  was  pledged  for  the  payment  of  his  claims, 
or  the  United  States  will  not  give  up  the  bonds.  From  the  other 
creditors  the  United  States  require  no  such  release. 

The  United  States  do  not  interfere  between  Texas  and  those 
to  whom  Texas  is  indebted.  And  it  is  very  unreasonable  in  Texas 
to  expect  the  United  States  to  aid  and  abet  her  in  the  design  she 
has  of  forcing  a  compromise  on  her  creditors.  In  that  case,  the 


188  THE  FISCAL  HISTORY  OF  TEXAS. 

disgrace  of  a  shameful  act  of  repudiation,  which  now  attaches  to 
Texas  exclusively,  would  be  shared  by  the  whole  Union. 

Texas  had  no  "  equitable  claim  for  an  equivalent  for  the  loss  of 
her  revenues  arising  from  import  duties."  When  she  was  admitted 
into  the  Union,  she  was  admitted  to  a  participation  in  all  the 
benefits  which  its  original  members  enjoyed,  and  surrendered  no 
more  than  others  surrendered.  Nay,  she  was  admitted  to  more 
than  equal  benefits,  for  she  was  suffered  to  retain  her  wild  lands, 
while  the  United  States  had  to  take  charge  of  the  wild  Indians 
upon  them.  The  expenditures  of  the  United  States  in  Texas,  and 
for  the  benefit  of  Texas,  have,  in  the  seven  years  since  annexation, 
exceeded  the  gross  amount  of  the  debt  of  the  late  Republic. 

Different  is  the  relation  of  the  United  States  to  the  creditors  of 
Texas.  It  is  true,  "  the  debt  is  one  which  Texas  owes,"  and  which 
Texas  ought  to  pay.  But  Texas  once  could  not,  and  now  will  not 
pay  ;  and  here,  according  to  the  laws,  of  nations  and  the  principles 
of  equity,  commences  the  obligation  of  the  United  States,  as  Texas 
transferred,  and  the  United  States  received,  a  branch  of  revenue, 
which  was  pledged  to  its  full  value  to  the  old  creditors  of  Texas. 

u  I  therefore  recommend  to  the  honorable  Legislature  that  our  Senators 
in  Congress  be  instructed,  and  our  representatives  requested,  to  use  all 
proper  exertions  to  procure  such  a  modification  of  the  fifth  article  of  the 
second  section  of  the  act  of  September  9,  1850,  as  will  authorize  and  re 
quire  the  Secretary  of  the  Treasury  to  issue  to  the  State  all  the  stock  con 
templated  by  the  fourth  article  of  the  said  act,  upon  her  filing  such  releases 
to  the  United  States  as  may  be  deemed  necessary  to  exonerate  the  Federal 
Government  from  any  liability  for  any  portion  or  all  the  debt  of  Texas." 

8trange  things  happen  in  the  political  world,  but  it  would  be 
very  strange  if  such  an  act  should  be  passed,  as  it  would  make 
the  United  States  liable  for  debts  to  the  amount  of  millions,  for 
which  they  have  already  appropriated  millions,  nominally  for  the 
purchase  of  worthless  lands,  but  really  for  the  payment  of  these 
very  debts. 

"  I  recommend  this  course  because  it  is  the  best  which  my  mind  suggests 
to  relieve  this  subject  from  all  difficulty ;  but,  as  it  is  possible  that  Congress 
may  not  concur  in  the  propriety  of  making  this  modification,  we  should,  in 
such  a  contingency,  prepare  ourselves  in  the  bast  way  we  can  to  meet  it.  I 
trust  I  have  shown  the  necessity  of  placing  this  matter  upon  a  different 
footing  from  that  on  which  it  now  stands,  if  we  expect  to  close  it  within  any 
reasonable  period,  or  in  any  manner  which  would  be  at  all  satisfactory  to 
the  State.  Indeed,  the  difficulties  which  must  be  overcome  in  its  adjust 
ment,  so  long  as  it  remains  in  its  present  condition,  are  so  obvious  that  it 


THE  FISCAL  HISTORY  OF  TEXAS.  189 

requires  no  argument  to  prove  that  immediate  steps  should  be  taken  to 
obviate  them.  I  therefore  further  recommend  to  the  honorable  Legislature 
that  a  law  be  passed,  at  its  present  session,  limiting  the  time  within  which 
the  creditors  of  the  State,  holding  the  class  of  claims  referred  to,  shall  tile 
their  releases  to  the  United  States  ;  declaring  that,  in  default  of  their  doing 
so  within  the  prescribed  time,  the  claims  shall  forever  be  barred." 

Texas  had  already  passed  laws  to  compel  her  creditors  to  bring 
in  their  accounts  to  have  them  scaled  down  to  one-half,  one-fourth, 
or  one-fifth  of  what  was  due  to  them,  under  the  penalty  of  forfeit 
ing  the  whole.  Here  is  a  suggestion  that  these  same  creditors, 
already  scaled  by  force,  shall  by  more  force  be  compelled  to  sign 
releases  to  the  United  States,  or  have  their  claims  barred  forever  ! 

The  Governor  did  not  stand  alone  in  these  views,  for,  even  be 
fore  he  sent  in  his  message,  a  bill  was  introduced  into  the  Senate 
of  Texas  "  to  require  the  creditors  to  sign  release^  to  the  United 
States." 

"It  has  further  occurred  to  me,  as  the  President  has  decided,  that  the 
revenues  from  imports  were  specially  pledged  (in  contemplation  of  the 
'  Boundary  Act')  for  an  amount  of  our  public  debt,  almost  equal  (if  it  has 
all  been  filed)  to  the  reserved  stock,  that  it  might  be  advisable  to  appropriate 
the  stock  so  withheld  to  the  payment  of  that  portion  of  the  debt  for  which 
imports  were  pledged,  and  which  would,  consequently,  come  under  this  de 
cision  of  the  President;  said  stock  to  be  issued  to  the  creditors  holding  these 
pledges  as  soon  as  the  United  States  will  so  amend  the  act  of  the  General 
Congress  as  to  give  Texas  control  of  the  same." 

There  is  no  necessity  for  any  new  act.  The  moment  the  cre 
ditors,  either  voluntarily  or  by  compulsion,  sign  the  releases  to  the 
United  States,  Texas  will  get  control  of  the  bonds. 

"  I  also  recommend  that  a  sufficient  amount  of  the  five  millions  of  stock 
within  the  present  control  of  the  State  be  appropriated  to  the  payment  of 
that  class  of  debts  not  covered  by  a  pledge  of  import  duties,  under  the  de 
cision  of  the  President.  This  character  of  the  indebtedness  amounts  to 
$985,422,  and  has  been  denominated  the  second  class.  It  is  due  mainly 
to  our  own  citizens  for  personal  services  rendered." 

In  this  respect,  it  differs  not  from  the  evidences  of  the  debts 
held  by  citizens  of  other  States.  They  were  all  incurred,  either 
directly  or  indirectly,  for  such  services  and  supplies.  But  drawing 
a  line  of  distinction  between  creditors  residing  within  and  without 
the  bounds  of  the  State  appears  to  be  a  fixed  principle  of  Texan 
policy. 

"  From  the  report  of  the  comptroller,  it  is  evident  that  the  whole  ten 
millions  of  dollars  will  not  be  required  to  discharge  the  outstanding  liabili- 


190  THE  FISCAL  HISTORY  OF  TEXAS. 

ties  of  the  State,  according  to  the  scale  which  has  been  adopted  for  ascer 
taining  the  actual  amount  of  those  liabilities,  and  from  which  I  can  see  no 
just  reason  to  depart;  and  it  will,  therefore,  become  a  subject  of  interesting 
inquiry  to  you,  as  to  the  best  mode  of  disposing  of  the  surplus." 

The  Governor  then  recommends  that  the  surplus  be  applied  to 
fostering  general  education  and  internal  improvements. 

Again,  we  say,  Governor  Bell  must  not  be  held  personally  respon 
sible  for  the  false  doctrines  embodied  in  his  message.  In  uttering 
them,  he  was  the  mouth-piece  of  the  community  he  represented,  or 
rather  of  the  active  politicians  with  whom  he  was  most  closely  con 
nected.  He  entertained  these  sentiments  in  common  with  them. 
But  who  can  breathe  an  infected  atmosphere  and  escape  un 
harmed  ? 

He  was  wrong  throughout,  because  he  viewed  everything  from 
a  wrong  standpoint.  The  evident  expectation  of  Congress  was 
that  the  five  millions  passed  over  unconditionally  to  Texas  would 
be  applied  by  her  to  the  payment  of  these  debts,  for  which,  in  a 
certain  sense,  the  United  States  are  regarded  as  responsible.  How 
else  could  the  releases  be  obtained,  the  filing  of  which,  in  the  Trea 
sury  Department  of  the  United  States,  was  an  indispensable  pre 
requisite  to  the  payment  of  the  second  five  millions,  according  to 
the  terms  of  the  compact  ?  No  one  could  suppose  that  the  creditors 
of  Texas,  holding  securities  for  which  the  revenues  of  the  Republic 
had  been  pledged,  and  which  they,  from  the  day  of  annexation, 
had  contended  had  been  virtually  assumed  by  the  United  States, 
would  file  their  releases  unless  they  were  paid.  It  is,  therefore, 
obvious  that  the  unconditional  issue  of  the  first  five  millions  was 
intended  to  enable  Texas  to  satisfy  this  class  of  creditors  and  ob 
tain  their  releases,  so  that  she  could  receive  the  second  five  millions, 
according  to  the  terms  of  the  act  to  which  she  had  given  her  full 
and  free  assent. 

Instead,  however,  of  applying  these  five  millions  as  they  ought 
to  have  been  applied,  Texas  applied  part  of  the  money  to  the  pay 
ment  of  debts  for  which  the  United  States  are  in  no  way  liable, 
and  another  part  to  the  payment  of  her  State  expenses !  It  was 
apparently  only  because  some  of  the  members  of  the  Legislature 
favored  railroads,  and  some  the  clearing  out  of  rivers,  that  all  that 
remained  of  the  five  millions  was  not  appropriated  to  works  of  in 
ternal  improvement. 


THE  FISCAL  HISTORY  OF  TEXAS.  191 

By  this  strange  proceeding,  Texas  has  rendered  it  difficult,  if  not 
impossible,  to  comply  with  her  own  part  of  the  compact,  and  thus 
greatly  increased  the  perplexities  of  the  question. 


CHAPTER   XXVIII. 

PROCEEDINGS  OF  THE  FOURTH  LEGISLATURE,  CONTINUED. 

Report  of  the  auditor  and  comptroller  scaling  down  the  public  debt — Extracts  from 
and  remarks  on  the  same — Treasury  notes — Ten  per  cent,  consolidated  fund  of 
1837 — Eight  and  ten  per  cent,  funded  debt  of  1846 — Treasury  bonds — Loan 
from  Bank  of  the  United  States — Debt  due  for  steamship  Zavalla — Debts  to 
Dawson,  Schott,  and  Whitney — Difficulties  in  applying  the  scaling  principle — The 
cases  of  assignees  in  some  instances  of  greater  hardship  than  those  of  original 
claimants — Injustice  of  stopping  interest  after  July,  1850 — Act  confirming  the 
award  of  the  auditor  and  comptroller — Governor  Bell  vetoes  the  act,  but  it  passes 
by  a  large  majority. 

Two  days  after  the  Governor  had  sent  in  his  message,  the  auditor 
and  comptroller  made  a  report,  which,  as  it  was  the  basis  of  the 
subsequent  action  of  the  Legislature,  we  have  inserted  at  length  in 
Appendix  U.  Inasmuch  as  the  classification  of  the  debts  therein 
contained  was  finally  adopted,  a  particular  examination  of  this 
report  becomes  necessary. 

After  giving  a  table  containing  the  original  amounts  of  the  debts, 
and  the  rates  at  which  they  had  been  scaled,  the  auditor  and  comp 
troller  make  some  remarks  on  each  class. 

Speaking  of  the  treasury  notes,  they  say  that  for  the  first  issue 
(the  printed  notes)  the  government  had  received  par,  and  they  had 
accordingly  rated  them  at  par.  They  then  add: — 

"To  the  engraved  interest  notes  we  have  assigned  an  average  value  of 
fifty  cents  on  the  dollar.  These  notes  were  issued  under  the  provisions  of 
the  same  act  that  the  printed  bills  were,  and  took  their  place ;  about  the 
time  of  the  first  issue  of  these  notes  (the  spring  of  1838),  this  species 
of  the  government  paper  commenced  depreciating  in  value,  so  that,  when  the 
act  of  19th  of  January,  1839,  prohibiting  their  further  issue,  went  into  ope 
ration,  they  were  worth  but  about  forty  cents  on  the  dollar." 

Here  we  find  that  about  the  time  this  issue  commenced,  treasury 
notes  began  to  depreciate.  Hence  the  State  got,  for  the  first  batch 


192  THE  FISCAL  HISTORY  OF  TEXAS. 

of  this  issue,  par,  or  nearly  par ;  for  the  next  batch  ninety  cents 
in  the  dollar;  for  the  next  eighty,  and  so  on  till  they  fell  to  forty. 
The  Republic  received  for  these  notes  as  many  different  values  as 
there  are  between  forty  cents  and  ninety,  or  forty  cents  and  a  hun 
dred.  Yet  the  man  who  gave  ninety  cents  in  value  for  the  notes 
is  to  receive  no  more  than  he  who  gave  forty.  Veritably,  this  is 
not  equitable  adjustment,  even  on  Texan  principles  of  equity.  The 
State  has  professed  a  willingness  to  give  back  as  much  as  she  re 
ceived.  According  to  her  own  confession,  she  received  in  value 
for  some  of  the  engraved  interest  notes  ninety  cents  in  the  dollar, 
and  now  she  proposes  to  pay  the  holders  of  them  only  fifty  cents. 

"To  the  treasury  notes  not  bearing  interest,  generally  known  as  'red 
backs/  we  have  assigned  an  average  value  of  twenty-five  cents  on  the  dollar. 
These  notes  superseded  the  engraved  interest  notes  above  referred  to,  and 
the  first  issue  of  them  was  made  during  the  spring  of  1839,  when  they 
were  worth  about  thirty-seven  and  a  half  cents  in  the  dollar.  They  continued 
depreciating;  so  that,  in  1841,  the  government  was  compelled  to  pay  them 
out  at  from  twelve  to  fifteen  cents  on  the  dollar.  The  value  which  we  have 
given  them  is  conceived  to  be  equitable,  as  an  average,  both  to  the  govern 
ment  and  the  holder." 

Here  is  averaging  again.  John  Smith  gave  the  government  the 
equivalent  of  thirty-seven  cents  and  a  half  in  the  dollar,  his 
brother  Thomas  gave  twenty-five  cents,  and  his  cousin  Samuel 
gave  only  twelve  cents  and  a  half.  John  gave  three  times  as  much 
as  Samuel,  and  Samuel  gave  only  half  as  much  as  Thomas.  But 
thirty-three  and  one-third  per  cent,  is  deducted  from  John,  while 
fifty  per  cent,  is  added  to  Samuel,  in  order  that  both  may  be  placed 
on  an  equality  with  Thomas.  As  the  amount  of  these  "  red  backs" 
was  nearly  two  millions,  it  is  plain  that  individuals  must  here  be 
wronged  in  the  amount  of  thousands  of  dollars,  even  on  Texan 
principles  of  dispensing  justice. 

But  this  is  not  all. 

"  It  is  impossible  to  ascertain,  from  the  date  of  the  issue  of  these  bills, 
as  shown  on  the  face,  what  they  were  worth  when  last  paid  out.  For  in 
stance,  a  bill  issued  in  1839,  at  say  thirty-seven  cents  and  a  half  in  the  dol 
lar,  and  after  having  been  returned  to  the  treasury  in  the  collection  of 
revenue,  may  have  been  reissued,  the  year  following,  at  twenty-five  cents  in 
the  dollar,  and  so  on;  and,  in  1841,  when  it  may  have  been  last  paid  out, 
at  one-eighth  of  its  ostensible  value." 

This  is  an  admission,  by  the  auditor  and  comptroller,  that 
they  could  not  carry  out  the  principle  they  had  adopted.  Even 


THE  FISCAL  HISTORY  OF  TEXAS.  193 

the  doctrine  of  averages  failed  them.  The  truth  is  that  the  Legisla 
ture  imposed  a  task  on  them  which  neither  they  nor  any  other  men 
could  perform.  Neither  auditors,  nor  comptrollers,  nor  courts  of 
law,  nor  courts  of  chancery  can  effect  an  equitable  adjustment  of 
debts  contracted  in  a  fluctuating  currency,  and  the  evidences  of 
which  pass  from  hand  to  hand  by  simple  transfer.  Unless,  in  such 
cases,  evidence  of  what  a  State  has  promised  to  pay  is  regarded 
as  evidence  of  what  a  State  ought  to  pay,  everything  is  thrown 
into  uncertainty. 

The  like  difficulties,  it  will  be  found,  attended  the  scaling  of  the 
"  consolidated  funded  debt  of  7th  June,  1837." 

"  The  stock  known  by  this  title  was  issued  under  the  provisions  of  an 
act  of  Congress,  approved  June  7,  1837,  and,  could  it  be  analyzed,  would 
be  subject  to  the  greatest  variety  of  equivalent  rates.  We  found  it  impos 
sible  to  refer,  in  each  instance,  to  the  original  record,  to  ascertain  at  what 
rate  each  claim  had  been  audited  for  which  stock  was  issued.  Even  had, 
or  could  we  have  done  so,  we  would  have  failed  to  a  great  extent  in  acquir 
ing  this  information,  for  the  reason  that  the  government,  for  a  long  time, 
would  not  acknowledge  any  discount  on  her  paper;  and  the  result  was  that 
accounts  were  made  out,  augmented  in  amount,  so  as  to  make  good  the 
deficit  in  the  value  of  the  currency.  Hence,  the  only  practicable  mode 
which  suggested  itself  was  to  make  an  average,  which  we  accordingly  did, 
and  assigned  to  it  a  value  of  seventy  cents  in  the  dollar.  It  is  believed  that 
this  average  is  about  what  the  government  received  in  the  main,  and  will, 
with  a  few  exceptions  (which  will  hereafter  be  alluded  to),  fully  remunerate 
the  present  holders,  as  it  is  now  generally  in  the  hands  of  third  parties,  who, 
in  most  instances,  acquired  it  at  much  less  value  from  the  original  investor 
than  that  now  assigned  it." 

In  this  place,  it  is  acknowledged  that  it  was  impossible  to  ascer 
tain  either  what  value  the  original  claimants  had  parted  with,  or 
what  the  government  had  received.  The  rates  were  various,  and 
may  have  been  from  twenty-five  cents  up  to  ninety.  But  one  ave 
rage  is  struck  for  all.  It  is  the  case  of  the  treasury  notes  over  again. 

A  new  principle  of  "equitable  adjustment"  is  now,  however,, 
introduced.  Before,  it  was  what  the  government  had  received ;  now, 
it  is  what  the  "present  holders"  have  paid.  Admit  this  as  a  rule 
of  settlement  in  regard  to  public  securities  generally,  and  what 
will  be  the  consequence  ?  Public  stocks  are  not  unfrequently 
above  par.  Then,  if  what  a  holder  of  public  securities  has  given 
for  them  is  to  determine  what  a  State  is  to  pay  for  them  when  the 
time  comes  for  redeeming  them,  the  State  must,  in  addition  to  the 
original  amount  of  principal,  pay  five  to  twenty  per  cent,  premium. 
13 


194  THE  FISCAL  HISTORY  OF  TEXAS. 

We  pass  on  to  the  "  eight  and  ten  per  cent,  funded  debt  of 
the  5th  February,  1840." 

"  We  have  assigned  to  this  class  of  securities  an  average  value  of  thirty 
cents  on  the  dollar.  This  stock  was  issued  under  the  authority  of  an  act 
of  Congress,  approved  February  5th,  1840,  and  was  created  for  the  purpose 
of  withdrawing  and  lessening  the  amount  of  revenue  currency  then  in  cir 
culation,  with  a  view  of  enhancing  the  value  of  the  residue.  The  induce 
ment  held  out  to  the  creditors  to  surrender  a  revenue  currency,  and  to  take 
one  which  could  not  be  used  in  that  way,  was  the  promise  of  the  govern 
ment  to  pay  the  stipulated  interest  seim-annually  in  specie;  which,  it  is  well 
known,  she  was  unable  to  do.  The  value  attached  to  this  stock  may  act 
onerously  on  some  holders,  but  it  will  fully  remunerate  a  large  majority. 
It  icould  be  much  more  difficult  in  this  fund  than  in  any  other  to  ascertain 
the  exact  value  the  government  received  for  the  investments  in  it,  as  it  is 
composed  of  interest  notes,  l  red  backs/  and  audited  paper." 

Here  let  us  stop,  and  drop  a  tear  of  pity  on  the  hard  fate  of  the 
original  holders  of  this  stock.  We  have  no  sympathy  to  spare  just 
now  for  the  innocent  purchasers  at  second  hand.  They  must  weep 
for  themselves. 

But  behold  the  hard  fate  of  the  original  claimants.  They  had 
Texan  securities  with  which  they  might,  according  to  law,  have 
paid  their  taxes.  They  parted  with  these  in  exchange  for  others 
not  so  available,  because  the  Republic  wished  "  to  lessen  the 
amount  of  revenue  currency."  "The  inducement  held  out  to 
them  to  surrender  this  revenue  currency,  and  take  one  which  could 
not  be  used  in  that  way,  was  the  promise  of  the  government  to 
pay  the  stipulated  interest  semi-annually  in  specie." 

Does  the  government  fulfil  its  promise  ?  No,  not  for  one  single 
half  year. 

What  then  does  it  do  ?  Why,  after  a  lapse  of  some  eight  or 
ten  years,  it  passes  a  law  declaring  that  these  public  creditors 
shall  be  paid  only  thirty  per  cent,  of  their  claims !  By  the  fund 
ing  law  of  1840,  these  claims  are  fully  and  freely  admitted  to  the 
amount  of  $778,280  ;  by  the  scaling  law  of  1848,  they  are  reduced 
to  $233,484 ! 

How  much  better  it  would  have  been  for  many  of  these  claim 
ants  if  they  had  held  on  to  their  original  evidences  of  the  public 
debt,  and  not  been  seduced  into  a  surrender  of  them  by  the  pro 
mise  of  the  government  to  pay  the  stipulated  interest  semi-annually 
in  gold  and  silver.  Among  the  amounts  thus  surrendered  were 
treasury  notes  of  the  first  and  second  issue,  and  audited  drafts  and 


THE  FISCAL  HISTORY  OF  TEXAS.  195 

audited  paper  of  equal  value.  If  they  had  held  on  to  the  first 
issues  till  the  scaling  system  was  adopted,  they  would  have  obtain 
ed  par  for  them.  If  they  had  held  on  to  the  second  issues,  they 
would  have  received  fifty  cents.  But,  having  been  induced  by 
the  fair  promises  of  the  government  to  surrender  them,  they  now 
get  but  thirty  cents  ! 

The  "eight  percent,  treasury  bonds"  must  next  engage  our 
attention. 

"  Twenty  cents  in  the  dollar  is  the  average  equivalent  value  assigned 
this  class  of  the  government  paper.  These  bonds  were  issued  to  supersede, 
to  some  extent,  and  take  the  place  of  treasury  notes.  There  is  less  danger 
of  individual  hardship  growing  out  of  the  assignment  of  an  average  equiva 
lent  value  to  these  bonds  than  that  of  any  other  of  the  government  securi 
ties;  they  were  seldom  ever  issued  at  more  than  twenty-five  cents  in  the 
dollar,  and  rarely  less  than  fifteen  cents  in  the  dollar.  The  value  assigned 
them  is  deemed  equitable." 

Equitable,  indeed !  Twenty  per  cent,  is  deducted  from  one 
class  of  claimants,  and  thirty  per  cent,  given  to  another.  The 
man  who  invested  the  value  of  one  hundred  specie  dollars  in  trea~ 
sury  bonds,  when  their  market  price  was  twenty-five  cents  in  the 
dollar,  is  now  to  receive  but  eighty  dollars;  while  he  who  invested 
the  same  amount  in  the  same  bonds  when  they  were  at  fifteen  cents, 
is  to  receive  one  hundred  and  thirty-three  dollars.  And  in  this 
way  $766,800  of  public  debt  is  "  equitably  adjusted"  down  to 
$153,360! 

"  There  is  less  danger,"  say  the  auditor  and  comptroller,  "of 
individual  hardship  growing  out  of  an  average  equivalent  value  to 
these  bonds  than  that  of  any  other  of  the  government  securities." 
Perhaps  so.  But  hardship  is  one  thing,  injustice  is  another.  It 
may  be  a  hard  thing  to  compel  a  poor  man  to  pay  his  debts ;  but 
it  is  not  unjust.  There  may  be  no  hardship  in  depriving  a  rich 
man  of  half  his  dues  ;  but  it  would  be  very  unjust.  It  is  the  duty 
of  legislative  bodies  to  make  just  laws,  and  of  auditorial  boards  to 
make  equal  awards  to  rich  and  poor — when  the  Legislature  will  let 
them. 

But  we  do  not  think  the  case  of  the  holders  of  these  treasury 
bonds  quite  as  free  from  hardship  as  has  been  represented.  The 
government  issued  these  bonds,  and  they  gave  services  and  sup 
plies  in  exchange  for  them.  The  government  promised  that  these 
bonds  should  be  receivable  for  all  public  dues,  and  in  about  two 


196  THE  FISCAL  HISTORY  OF  TEXAS. 

years  it  revoked  its  promise.  The  government  made  a  special 
pledge  of  the  revenue  arising  from  the  license-tax  and  the  tax  on 
personal  property  for  the  payment  of  interest  on  these  bonds, 
and  afterwards  applied  the  revenue  to  other  purposes.  The 
government,  to  induce  people  to  part  with  their  substance  in  ex 
change  for  these  bonds,  promised  to  pay  them,  semi-annually, 
eight  per  cent,  interest  in  gold  and  silver.  It  has  never  in  one 
half  year  fulfilled  its  promise.  Finally,  after  keeping  these  claim 
ants  out  of  their  just  dues  for  twelve  years,  the  government  re 
solves  to  pay  them  only  one-fifth  as  much  as  it  had  contracted  to 
pay.  If  this  had  been  understood  when  the  issue  of  the  bonds 
commenced,  their  value  in  the  market  would  have  been  reduced 
four-fifths,  so  that,  instead  of  twenty-five  cents,  only  five  cents  in 
the  dollar  would  have  been  given  for  them,  and  instead  of  five 
cents,  only  one.  Such  would  then  have  been  the  value  of  a  Texas 
promissory  dollar,  as  Texas  now  interprets  her  promises. 

"  Audited  paper,"  continues  the  auditor  and  comptroller,  "when 
issued  at  par,  has  been  allowed  accordingly ;  when  less  than  par, 
a  corresponding  deduction  has  been  made  ;  the  records  and  vouch 
ers  showing  the  rate  at  which  it  was  audited." 

This  proceeding  was  on  correct  principles.  There  were  two 
currencies  in  Texas,  and  as  bills  were  sometimes  made  out  in  the 
one,  and  sometimes  in  the  other,  it  was  necessary  to  make  an  equa 
tion  of  them.  Here  are  four  men,  each  of  whom  furnishes  one 
hundred  beeves  to  the  army.  The  first  makes  out  his  bill  in  specie, 
and  charges  five  dollars  a  head.  The  remaining  three  make  their 
charges  in  paper  currency,  designing  in  each  instance  to  charge 
the  equivalent  of  specie;  but,  as  the  paper  currency  is  subject  to 
successive  depreciation,  their  charges  are  respectively  $750, 
$1000,  and  $1500.  Without  an  equation  of  currencies,  justice 
could  not  be  done  to  the  State  and  to  them  also. 

The  auditor  and  comptroller  then  proceed  to  speak  of  some 
special  debts  of  the  Republic. 

uln  the  first  class  are  included  the  bonds  issued  to  the  Bank  of  the 
United  States  for  a  loan  of  $400,000,  obtained  from  that  institution  in  the 
year  1839;  also,  the  claim  of  James  Holford  and  associates  for  the  purchase 
of  the  steamer  '  Zavalla.'  A  value  corresponding  to  what  the  government 
actually  received  has  been  assigned  to  each." 

The  value  the  government  actually  received !     But  what  was 


THE  FISCAL  HISTORY  OF  TEXAS.  197 

the  value  it  engaged  to  give?  Waiving  the  case  of  the  United 
States  Bank,  we  may  remark  that  it  is  not  at  all  likely  that  the 
owners  of  the  steamboat  "Zavalla"  would  have  parted  with  value  in 
hand,  certain  and  immediate,  without  the  expectation,  or  at  least 
the  promise  made  to  them,  of  receiving  greater  value  in  time,  espe 
cially  in  a  case  in  which  the  prospect  of  payment  was  so  very  re 
mote  and  dependent  on  so  many  contingencies.  The  debtor  is  not 
the  sole  judge  of  the  value  he  receives.  The  creditor,  also,  must 
be  allowed  some  say  in  such  matters.  The  steamboat  "Zavalla"  was 
worth  to  the  Republic  of  Texas  all  she  engaged  to  pay  for  it. 
Else,  why  did  she  engage  to  pay  that  for  it  ?  What  Texas  pro 
mised  to  pay  the  former  owners  of  the  "Zavalla"  is  what  she  owes 
them. 

Next  come  the  debts  of  Messrs.  Dawson,  Schott,  and  Whitney. 

"  Since  our  last  report,  Messrs.  James  Schott  and  E.  D.  Whitney  have 
filed  their  claims,  composed  of  one  of  the  bonds  issued  to  Frederick  Dawson, 
of  Baltimore,  in  payment  for  the  navy.  These  gentlemen,  although  not 
known  in  the  contract,  are  acknowledged  by  Mr.  Dawson  to  have  been 
equally  interested  in  that  transaction ;  and  the  readiness  manifested  in  aid 
ing  the  cause  of  Texas,  by  undertaking  and  carrying  out  a  contract  requir 
ing  a  large  pecuniary  outlay,  at  a  time  when  the  public  credit  was  at  an 
exceedingly  low  stage,  procured  for  the  contractors  the  commendation  of 
the  late  Republic/' 

All  this  is  very  well.  But  resolutions  of  thanks  will  not  pay  for 
vessels  of  war.  These  commendations  were,  no  doubt,  very  de 
lectable  to  Messrs.  Schott,  Whitney,  and  Dawson;  but,  as  these 
gentlemen  are  not  pure  spiritualities,  they  cannot  live  on  commen 
dations.  What  of  a  more  substantial  nature  does  Texas  propose 
to  allow  them  ?  Listen. 

"  In  assigning  to  this  claim  fifty  cents  on  the  dollar,  as  the  value  re 
ceived  by  the  government,  we  have  been  governed  by  the  law  making  the 
appropriation,  and  the  contract  entered  into  by  the  agent  of  the  govern 
ment  and  Mr.  Dawson.  This  contract,  subsequently  recognized  by  legisla 
tive  enactment  (a  copy  of  which  accompanies),  stipulates  the  price  of  the 
vessel  at  $280,000,  to  secure  the  payment  for  which,  two  bonds  of  the  Re 
public,  for  $280,000  each,  were  deposited  with  the  President  of  the  Girard 
Bank  at  Philadelphia,  with  the  understanding  that  they  could  be  redeemed 
at  the  end  of  twelve  months  by  the  payment  of  the  $280,000,  and  ten  per 
cent,  interest  on  the  two  bonds;  otherwise,  the  said  bonds  to  become  the 
property  of  Mr.  Dawson.  The  government  was  unable  to  make  the  pay 
ment  at  the  time  specified;  and  the  president  of  the  bank,  according  to  in 
structions,  delivered  the  bonds,  amounting  to  $560,000,  to  Mr.  Dawson." 

Here  is  a  contract  as  solemn  as  contract  could  be,  ratified  by 


198  THE  FISCAL  HISTORY  OF  TEXAS. 

legislative  enactment.  "The  government  was  unable  to  meet  the 
payment  at  the  time  specified,"  and  then,  after  thirteen  years' 
delay,  the  contract  is  further  violated  by  reducing  the  claim  to 
fifty  cents  on  the  dollar ! 

But  this,  say  the  Texans,  is  all  the  value  our  government  re 
ceived.  That,  we  reply,  is  not  so  certain.  Value  is  not  something 
fixed,  absolute,  and  immutable.  It  is  always  relative,  and  varies 
with  circumstances.  Ships  of  war  were  of  great  value  to  Texas 
then  :  they  would  be  of  no  value  to  her  now.  The  commissioners 
of  Texas  were,  for  a  long  time,  hawking  about  Texas  bonds,  their 
only  marketable  commodity.  It  was  offered  for  sale  in  open 
market ;  Messrs.  Dawson,  Schott,  and  Whitney  gave  for  this 
merchandise  full  value.  They  gave  more  than  anybody  else  was 
willing  to  give — more  than  they  themselves  would  have  been 
willing  to  give  if  they  could  have  foreseen  the  length  of  time  they 
were  to  be  kept  out  of  their  just  dues. 

If  these  gentlemen  should  now  be  paid  in  full,  it  would  be  no 
compensation  for  the  injury  done  them.  He  is  not  a  very  success 
ful  merchant  who  cannot  double  his  capital  in  twelve  or  thirteen 
years.  Dawson,  Schott,  and  Whitney,  but  for  their  connections 
with  Texas,  might  have  trebled  their  fortunes ;  perhaps  quadrupled 
them,  perhaps  not.  But,  whether  loss  or  gain  would  have  attended 
their  exertions,  one  thing  is  certain,  that,  according  to  contract, 
Texas  owes  Dawson,  Schott,  and  Whitney  $560,000,  and  interest. 

Two  of  these  claimants,  Messrs.  Schott  and  Whitney,  in  a  letter 
to  the  Governor  of  Texas,  dated  October  9,  1851,  make  the  follow 
ing  statement : — 

"  By  the  contract  concluded  on  the  part  of  the  Republic  of  Texas,  by 
Mr.  Samuel  M.  Williams,  with  Mr.  Dawson,  then  acting  also  for  us,  two 
prices  were  fixed  for  the  construction  and  equipment  of  the  vessels  required 
for  the  service  of  the  government — one  a  cash  price  of  three  hundred  and 
thirty-six  thousand  dollars,  and  the  other  a  credit  price  of  five  hundred  and 
sixty  thousand  dollars. 

"The  difference  between  these  two  prices  was  occasioned,  not  only  by  the 
uncertainty  of  the  continued  political  existence  of  the  Republic,  but  also  by 
the  consideration  of  the  great  embarrassment  which  the  advance  of  so  large 
a  sum  of  money  might  occasion  to  the  business  of  the  contractors.  The 
Republic  selected  the  latter  price,  and  we  received,  in  payment  for  our  part 
of  the  work,  the  bond  for  two  hundred  and  eighty  thousand  dollars  above 
mentioned.  *  *  *  *  The  choice  which  the  Republic  made  of  the 
credit  price,  and  her  failure  to  pay  at  the  maturity  of  the  bonds,  compelled 
us  to  sacrifice  all  our  available  means  at  a  ruinous  discount — exhausted  our 


THE  FISCAL  HISTORY  OF  TEXAS.  199 

private  fortunes — and  entirely  destroyed  the  very  profitable  business  then  in 
our  hands.  There  can  be  no  l  instance  of  hardship/  it  seems  to  us,  greater 
than  to  be  compelled  to  lose,  for  the  benefit  of  others,  mercantile  credit  and 
position ;  and  to  support  through  life  a  weight  of  indebtedness  incurred  from 
a  generous  confidence  in  the  honor  and  success  of  a  rising  State.  Such  is 
our  position;  and  if  the  Legislature  of  Texas  should  restrict  the  payment  of 
our  claim  to  what  was  once  fixed  as  the  cash  price,  the  amount,  at  this  late 
day,  will  be  insufficient  to  satisfy  the  debts  which  we  still  owe  on  her  ac 
count/' 

Such  have  been  the  calamities  of  two  of  the  creditors  of  Texas; 
and  hundreds  of  others  have  been  made  to  suffer  in  the  same  way, 
though  not  many  in  as  large  an  amount.  It  is  a  mistake  to  sup 
pose  that  the  great  body  of  the  present  holders  of  Texan  securi 
ties  got  them  at  very  low  rates.  The  writer  of  a  letter,  now  before 
us,  states — 

"  The  interests  of  creditors  have  been  somewhat  prejudiced  by  the  pre 
vailing  error  that  the  present  holders  of  the  eight  or  nine  millions  of  claims 
hold  them  at  a  low  cost.  Those  conversant  with  the  position  of  this  debt 
know  that  it  is  held  by  the  present  holders  at  a  cost  of  fully  seven  millions 
of  dollars.  It  is  true  that  Texan  securities  have  seen  a  very  low  mark  ;  but 
a  large  portion  of  the  claims  are  held  by  those  to  whom  they  were  ori 
ginally  issued,  while  the  vast  majority  of  those  that  were  sold  and  resold  are 
now  lodged  in  hands  of  purchasers  whose  confidence  in  a  sacred  promise 
and  pledge  had  led  them  to  bid  correspondingly  high." 

The  remarks  made  in  relation  to  the  case  of  Dawson,  Schott, 
and  Whitney  apply  to  the  case  of  Mr.  Holford,  for,  as  the  auditor 
and  comptroller  correctly  say,  "  The  terms  of  contract  between 
the  government  and  James  Holford  and  associates,  for  the  pur 
chase  of  the  steamer  '  Zavalla,'  are  similar  to  those  entered  into 
with  Mr.  Dawson."  Setting  aside  such  positive  contracts  as  these 
is  an  action  far  more  becoming  a  despotism  than  a  republic. 

The  next  paragraph  shows  that  the  auditor  and  comptroller  met 
•with  other  embarrassments  in  applying  the  principles  which  the 
Legislature  had  laid  down  for  their  guidance. 

"  In  the  average  value  assigned  to  the  consolidated  fund  of  June  7,  1837, 
there  came  to  our  knowledge  a  few  cases  of  hardship  where  the  government 
had  received  full  consideration  for  the  original  obligation  which  had  been 
converted  into  this  fund,  and  yet  owned  by  the  original  investor.  Had  we 
departed  from  the  rate  we  had  assigned  to  this  or  any  other  character  of 
liability,  in  any  one  instance,  no  matter  how  justifiable,  others  not  possess 
ing  the  same  merit  would  have  claimed  it,  and  the  consequence  would  have 
been  that  but  few  claimants  would  have  been  satisfied  with  any  other  clas 
sification  than  that  of  par.  For  this  reason,  we  determined,  in  all  instances, 
to  adhere  to  the  rate  affixed  to  each  class,  and  report  such  cases  of  hardship 


200  THE  FISCAL  HISTORY  OF  TEXAS. 

^as  might  arise  to  the  Legislature,  in  order  that  such  relief  may  be  awarded 
in  the  premises  as  appears  to  be  just.  We,  therefore,  accompany  this  report 
with  a  statement  marked  l  C/  of  such  cases,  and  hope  the  same  will  receive 
your  favorable  consideration/' 

In  this  place  is  again  brought  forward  the  favorite  Texan  notion 
that  more  justice  is  due  to  the  original  holder  of  a  public  obliga 
tion  than  to  him  to  whom  it  may  have  been  transferred.  Nothing 
can  be  more  erroneous.  If  a  bank-note  passes  through  five  thou 
sand  hands,  the  obligation  of  the  bank  to  pay  the  full  amount  to  the 
last  holder  is  just  as  strong  as  it  was  to  pay  it  to  the  first.  The  like 
is  true  in  regard  to  treasury  notes,  certificates  of  stocks,  and  other 
evidences  of  public  debt.  And  there  may,  sometimes,  be  greater 
hardship  in  refusing  payment  to  the  last  holder  than  to  the  first. 
If  a  man  dies,  and  his  treasury  notes  and  other  securities  pass  to 
his  wife  and  children,  they  are  no  longer  in  first  hands.  Waiving 
cases  of  this  kind,  there  are  others  equally  worthy  of  considera 
tion.  The  receipt  of  public  securities  from  their  original  holders 
is  not  always  matter  of  choice.  Their  creditors  may  be  compelled 
to  take  them  in  payment  of  debts  long  due,  because  they  can  get 
nothing  else.  It  is  very  hard,  then,  in  the  State  to  mulct  these 
second  and  third  hand  holders  of  one-half  of  their  dues,  because 
they  were  under  the  necessity  of  receiving  from  their  debtors  go 
vernment  paper  instead  of  money,  when  that  very  necessity  was 
created  by  the  State  in  putting  off  its  own  creditors  with  paper 
instead  of  money. 

The  creditors  of  a  State  living  within  the  bounds  of  the  State, 
though  they  may  be  directly  injured  by  the  receipt  of  government 
paper,  may  receive  some  compensation  in  the  improved  state  of 
public  affairs  consequent  on  a  successful  revolution.  This  is  the 
case  of  the  creditors  of  Texas  resident  in  Texas.  Their  political, 
civil,  and  religious  rights  are  now  secure.  Their  lands  have  in 
creased  in  value,  in  some  instances  many  fold.  In  this  way,  they 
may  have  been  amply  compensated  for  all  their  losses  through  "red 
backs,"  and  the  various  other  paper  devices  to  which  their  govern 
ment  resorted  in  order  to  get  from  them  their  property  and  their 
services.  Very  different,  however,  is  the  case  of  those  creditors 
who  reside  in  other  States.  Their  lands  have  not  been  increased 
in  value  by  the  annexation  of  Texas  to  the  Union  ;  and  their 
political,  civil,  and  religious  rights  are  no  more  secure  than  they 
were  before  the  Texan  revolution  commenced. 


THE  FISCAL  HISTORY  OF  TEXAS.  201 

If  the  public  securities  of  Texas  had  not  passed  into  the  hands 
of  the  residents  of  Louisiana,  Arkansas,  Georgia,  and  other  States, 
that  revolution  could  never  have  been  brought  to  a  successful  issue. 
As  it  was,  the  original  claimants  passed  them  over  to  the  Texan 
merchants ;  these  sent  them  to  the  United  States,  and  exchanged 
them  for  merchandise.  In  this  way,  Texas  obtained  her  supplies 
of  arms,  clothing,  and  provisions.  It  was  this,  and  this  alone, 
that  saved  the  Republic.  But,  now  that  the  Republic  is  saved, 
this  is  to  be  made  a  reason  for  depriving  those  who  were  the 
indirect  instruments  of  its  salvation  of  from  one-fourth  to  four- 
fifths  of  their  dues. 

Who  in  Texas  was  able  to  hold  on  to  such  an  immense  amount 
of  securities  as  the  Republic  issued  ?  Who  would  have  received 
them  at  all  if  it  had  been  a  condition  that  he  must  hold  them  till 
the  Republic  might  be  able  to  redeem  them,  perhaps  in  five  years, 
perhaps  in  ten,  perhaps  never?  What  soldier  would  have  received 
the  treasury  notes  in  pay  for  services,  or  what  farmer  would  have 
received  them  in  pay  for  provisions,  if  he  had  not  known  that  he 
could  pass  them  off  to  the  merchant  ?  And  what  merchant  in 
Texas  would  have  been  willing  to  receive  them  if  he  had  not  sup 
posed  the  whole  claim  thus  conveyed  to  him  might  be  transferred 
by  him  without  diminution  to  whomsoever  he  chose?  Whatever 
value  Texan  securities  may  have  had,  whether  little  or  great,  they 
owed  that  value  quite  as  much  to  the  action  of  those  who  got  them 
at  second  or  third  hand  as  to  the  action  of  the  original  claimants. 
And  unless  Texas  redeems  those  securities  in  full,  no  matter  in 
whose  hands  they  may  now  be  found,  she  will  not  give  back  the 
value  she  has  received. 

We  pass  next  to  the  subject  of  interest : — 

"  On  the  liabilities  stipulated  to  bear  interest,  we  have  calculated  it  from 
the  date  of  the  last  payment  to  the  1st  of  July,  1850,  in  accordance  with 
an  act  approved  February  11,  1850,  except  the  interest  treasury  notes,  on 
which  we  have  allowed  interest  to  the  1st  of  January,  1841,  as  all  holders 
of  this  character  of  notes  were  required  to  fund  them  by  that  time,  and 
the  appropriation  for  the  further  payment  of  interest  on  said  notes  was 
cancelled." 

Yes,  but  cancelling  an  appropriation  is  not  paying  a  debt.  The 
Legislature  could  not  in  justice  require,  all  it  could  do  was  to  invite, 
the  holders  of  treasury  notes  to  fund  them  on  a  certain  day.  If 
any  of  them  chose  not  to  accept  the  invitation,  that  did  not,  in  the 


202  THE  FISCAL  HISTORY  OF  TEXAS. 

least,  lessen  the  obligation  of  the  Republic  to  pay  what  it  had  pro 
mised.  Interest  on  a  debt  is  due  till  the  principal  is  paid.  No 
government  that  issues  obligations  bearing  interest  has  any  right 
to  cease  paying  interest  till  it  offers  to  its  creditors  the  full  amount 
of  said  obligations. 

Equally  arbitrary  and  inequitable  is  that  provision  of  the  law  of 
February  11,  1850,  which  declares  that  "all  liabilities  of  the  late 
Republic  of  Texas  shall  cease  to  bear  interest  from  and  after  the 
1st  day  of  July,  1850."  Just  as  much  right  would  the  Legislature 
have  had  to  say  that  they  should  not  bear  interest  after  the  1st 
day  of  July,  1840.  A  retrospective  act  of  this  character  would  have 
been  quite  as  just  as  a  prospective  one.  Not  till  two  years  after 
wards,  or  February,  1852,  did  Texas  even  commence  paying  her 
debts  at  the  scaled  rates ;  and  till  she  pays  all  her  debts  in  full,  in 
terest  will,  on  principles  of  equity,  be  continually  accruing  thereon. 

It  is  unnecessary  to  give  any  further  analysis  of  the  report  of 
the  auditor  and  comptroller.  They  are  estimable  men  and  able 
officers ;  but  the  Legislature  devolved  on  them  a  task  which  neither 
they  nor  any  one  else  could  perform. 

It  might  be  supposed  that  such  a  report  as  this  would  induce 
the  Legislature  to  pause  in  its  career  ;  but  it  did  not.  The  report 
itself  (though  that  was  not  the  object  of  its  authors)  contained  the 
most  indubitable  evidence  that  it  was  impossible  to  carry  out  the 
principles  that  had  been  adopted:  namely,  that  of  giving  to  each 
claimant  the  value  the  government  had,  according  to  its  own  esti 
mate,  received  for  the  claim  he  held.  But  the  Legislature  did  not 
see  this;  or  if  it  did,  it  did  not  care  for  it.  It  passed  the  law 
following  : — 

"An  act  confirming  the  action  of  the  auditor  &nd  comptroller,  under 
the  provisions  of  an  act  of  the  Legislature  to  provide  for  ascertaining  the 
debt  of  the  late  Republic  of  Texas,  approved  March  20,  J  848,  and  the  act 
supplementary  thereto,  approved  February  8,  1850. 

"  SECTION  1.  Be  it  enacted  by  the  Legislature  of  the  State  of  Texas,  That 
the  rate  of  payment  and  classification  assigned  to  each  class  of  debt  of  the 
late  Republic,  by  the  auditor  and  comptroller,  under  the  provisions  of  an 
act  entitled  '  An  act  for  Ascertaining  the  Debt  of  the  late  Republic  of 
Texas/  approved  March  20,  1848,  and  the  act  supplementary  thereto,  ap 
proved  February  8,  1850,  as  reported  by  said  officers  in  their  report  to  the 
Legislature  of  date  the  12th  of  November,  1851,  is  hereby  recognized  and 
adopted  by  the  State  of  Texas ;  and  the  value  assigned  to  each  class  of  lia 
bilities  by  said  officers  in  their  report  aforesaid  is  what  the  State  of  Texas 
recognizes  as  due  to  the  respective  claimants." 


THE  FISCAL  HISTORY  OF  TEXAS.  203 

The  bill  was  sent  to  the  Governor  the  23d  of  January,  and  on 
the  29th  he  returned  it  with  a  message,  in  which  he  said — 

"  I  have,  both  in  my  official  capacity,  and  as  a  private  citizen,  expressed 
my  approbation  of,  and  concurrence  in  the  general  basis  upon  which  the 
auditor  and  comptroller  have  classified  the  public  debt  of  Texas,  and  the 
value  assigned  to  them ;  but  there  is  no  general  rule  without  its  exception ; 
and  with  those  officers,  I  do  think  that  there  are  cases  of  individual  hard 
ship  to  which  an  application  of  the  general  basis,  upon  which  they  felt 
themselves  constrained  to  act,  does  not  render  justice." 

The  Governor  then  mentions  the  cases  referred  to  in  statement 
"C"  of  the  auditor's  report,  and,  conceiving  that  they  are  not  pro 
perly  provided  for  in  the  bill,  refuses  to  sign  it.  Towards  the 
close  of  his  message,  he  says — 

"  It  is  my  anxious  wish  to  see  the  State  of  Texas,  at  this  time  attracting 
universal  attention,  assume  a  position  in  reference  to  her  debt  which  will 
not  only  command  the  admiration  of  her  sister  States  and  of  foreign  powers, 
but  save  her  also  from  any  just  charge  of  repudiation.  So  far  as  it  lies  in 
my  power,  I  desire  every  creditor  of  Texas  to  have  what  in  justice  and 
equity  is  due  to  him.  Such,  too,  I  believe,  is  the  sentiment  of  the  people 
at  large,  and  of  the  Legislature." 

The  bill  was  passed  in  opposition  to  Gov.  Bell's  veto:  in  the 
Senate  by  a  vote  of  29  to  5 ;  in  the  House  by  a  vote  of  47  to  12. 


CHAPTER    XXIX. 

PROCEEDINGS  OF  FOURTH  LEGISLATURE,  CONTINUED:    1851-'52. 

Act  passed  for  the  liquidation  of  the  public  debt — Debt  payable  and  debt  sus 
pended — Effects  of  this  act  in  dividing  the  creditors  into  two  parties,  and  throw 
ing  the  odium  of  non-payment  on  the  United  States — The  money  received  from  the 
United  States  applied  to  pay  the  current  expenses  of  the  State  Government. 

THE  Legislature  did  not  confine  itself  to  an  act  giving  a  legal 
sanction  to  the  awards  of  the  auditor  and  comptroller.  It  made 
provision  for  an  agent  to  proceed  to  the  city  of  Washington  to 
receive  the  bonds  to  the  amount  of  five  millions,  about  which  there 
was  no  controversy,  and  the  interest  that  had  accrued  on  the  same. 
And  on  the  31st  of  Jan.,  1852,  it  passed  a  law  entitled  "An  act 


204 


THE  FISCAL  HISTORY  OF  TEXAS. 


providing  for  the  Liquidation  and  Payment  of  the  Debt  of  the  late 
Republic  of  Texas." 

In  Appendix  S,  this  law  will  be  found  at  length;  but  it  is  so 
intricate  in  its  provisions,  that  many  will  find  it  difficult  to  under 
stand.  We  shall  therefore  state  that  the  effect  of  it  was  to  divide 
the  whole  of  the  acknowledged  audited  debt  of  Texas  into  two 
classes,  debt  payable,  and  debt  suspended. 

The  debt  which  was  made  payable  immediately  after  the  passage 
of  the  act  embraced  the  following  items : — 

Original  amount. 

Ten  per  cent,  funded  debt  cre 
ated  by  act  of  Feb.  5,  1840 

Eight  per  cent,  funded  debt 
created  by  act  of  February 
5,  1840 

Audited  paper  issued  under  va 
rious  enactments  ....  74,441  26 

26,129  87 


Scaling  rate.        Scaled  amount. 


$754,000  00     30  cts.  $226,200  00 


24,280  00 


30 


Miscellaneous  liabilities 

Amount  filed  and  receipted  for 
as  second  class  debts  .  . 

Ditto,  third  class,  since  recog 
nized  as  second  class  .  . 

Amount  audited  by  special  acts 


various 
1  00 


7,284  00 

69,451  12 
26,129  87 


748,899  89     various          679,222  50 


16,467  95 
34,023  55 


00 
00 


16,467  95 
34,023  55 


$1,678,242  52  1,058,778  99 

For  the  payment  of  these  debts,  and  the  interest  thereon,  bonds 
to  the  amount  of  two  million  dollars  were  appropriated. 

The  reader  will  observe  that,  with  the  exception  of  the  eight 
and  ten  per  cent,  funded  stocks,  the  evidences  of  these  debts  were 
in  such  a  form  as  to  be  likely  not  to  find  a  general  market  beyond 
the  limits  of  the  State.  Thus,  the  debt  made  payable  was  the 
"  domestic  debt"  of  Texas.  He  will  also  observe  that  this  domes 
tic  debt  was  subject  to  a  very  small  scaling,  when  compared  with 
the  "foreign  debt,"  i.  e.,  the  debt  the  evidences  of  which  are  held 
principally  by  the  citizens  of  other  parts  of  the  Union. 

Having  still  on  hand  bonds  to  the  amount  of  three  million  dol 
lars,  the  Legislature  might  have  gone  further  in  its  payments;  but 
it  was  not  disposed  so  to  do.  It  made  the  payment  of  the  whole 
of  its  treasury  notes,  and  of  the  residue  of  its  stock  and  funded 
debt,  dependent  on  the  future  action  of  the  United  States.  These 
debts  were  not  to  be  paid  till  the  bonds  reserved  in  the  treasury 
of  the  United  States  should  be  paid  over  to  Texas,  or  such  por- 


THE  FISCAL  HISTORY  OF  TEXAS.  205 

tions  thereof  as  might  equal  in  amount  the  claims  for  which  the 
creditors  might  sign  the  required  releases. 

We  have  seen  that  a  bill  had  been  brought  before  the  Legislature 
to  compel  the  creditor  to  sign  releases  to  the  United  States.  But 
this  was  abandoned  as  too  bold  a  measure,  and  what  was,  no  doubt, 
regarded  by  its  authors  as  a  master-stroke  of  policy,  adopted  in  its 
stead.  This  would  throw  the  odium  of  non-payment  on  the  United 
States,  and  cause  the  creditors  of  Texas  to  make  common  cause 
with  her  in  getting  the  bonds  out  of  the  federal  treasury.  The 
five  millions  already  received,  with  the  interest  accrued  thereon, 
would,  indeed,  pay  the  whole  of  the  "filed"  debt,  as  scaled  by  the 
auditor  and  comptroller ;  but  two  millions  would  satisfy  the  domestic 
creditors.  The  remaining  three  millions  might  be  applied  to  pur 
poses  of  internal  improvement;  and  the  "foreign"  creditors  wait 
till  the  United  States  could  be  forced  or  persuaded  to  modify  the 
obnoxious  provision  which  denied  to  Texas  the  absolute  and  uncon 
ditional  control  of  the  remaining  bonds. 

The  scheme  was  cunningly  contrived,  and  not  the  less  so  in 
being  embodied  in  an  act  so  involute  and  convolute  that  probably 
many  who  voted  for  it  did  not  see  its  true  bearing. 

The  effect  intended  has,  in  part  at  least,  been  produced.  Some 
of  the  people  of  Texas  are  loud  in  their  complaints  "  about  the  in 
justice  of  the  United  States  in  withholding  from  the  State  the  bonds 
which  are  her  own  property,  thereby  preventing  Texas  from  paying 
her  creditors;"  when  the  truth  is  that  already  more  than  enough 
bonds  have  been  passed  over  to  Texas  to  pay  all  her  debts,  both 
domestic  and  foreign,  according  to  her  "  plan  of  settlement."  The 
whole  amount  which  Texas  has  to  pay,  according  to  the  award  of 
her  auditor  and  comptroller,  is,  interest  included,  only  $4,807,764 
37.  Supposing  the  bonds  to  bring  on  an  average  only  four  per 
cent,  premium,  they  are  worth  $5,200,000.  To  this  add  interest 
for  one  year  $250,000,  and  the  total  is  $5,450,000,  being  nearly 
$650,000  more  than  Texas  is  willing  to  pay. 

In  the  other  object  they  had  in  view,  the  framers  of  this  bill 
have  also  partially  succeeded.  A  portion  of  the  creditors  finding 
that  Texas,  though  she  had  ample  means  in  hand,  would  not  pay 
them  even  the  scaled  amount  of  these  debts,  have  united  their 
efforts  with  those  of  the  Texas  politicians  to  induce  the  United 


206  THE  FISCAL  HISTORY  OF  TEXAS. 

States  to  give  up  the  reserved  bonds,  or  so  many  of  them  at  least 
as  will  cover  the  amount  of  their  scaled  claims. 

A  statement  follows  of  the  various  items  of  debt,  the  payment 
of  which  has  been  suspended  by  the  complicate  action  of  Texas : — 

Original  amount.  Scaling  rate.         Scaled  amount. 

Ten  per  cent,  consolidated  fund, 

created  by  act  of  7th  June, 

1837      .......      $632,52680  70  cts.  $442,768  76 

Ten  per  cent,  consolidated  fund, 

created  by  act  of  7th  June, 

1887,  issued  under  an  act  for 

the  relief  of  Swartwout  and 

others 7,970  43       1  00  7,970  43 

Eight  per  cent,  treasury  bonds, 

created  by  act  of  5th  Febru 
ary,  1840 766,800  00          20          153,360  00 

Ten  per  cent,  treasury  notes  is 
sued  under  act  of  9th  June, 

first  issue 41,630  00       1  00  41,630  00 

Ten  per  cent,  treasury  notes  is 
sued  under  act  of  9th  June, 

second  issue 331,371  00  50  165,685  50 

Treasury  notes,  without  interest, 

issued   under   act   of    19th 

Jan.  1839,  third  issue    .     .     1,828,192  00  25          457,048  00 

Ten  per  cent,  bonds  issued  by 

commissioners  to  negotiate  a 

loan  for  $5,000,000,  viz.  :— 

For  loan  obtained  from  Bank 

of  United  States     .     .     .        457,380  00'  400,000  00 

For    purchase    of    steamer 

"Zavalla" 195,907  00  50  90,014  84 

For  purchase  of  naval  vessels 
under  contract  with  F. 
Dawson,  now  owned  by 
James  Schott  and  E.  D. 
Whitney 280,000  00  50  140,000  00 

Total  of  debt  suspended     .     .  $4,541,777  23  $1,898,477  53 

In  addition  to  this  act,  the  Legislature  passed  two  others,  one 
appropriating  $123,220  33  for  the  payment  of  other  portions  of 
the  second  class  debt,  and  another  appropriating  some  forty  or 
fifty  thousand  dollars  to  cover  third  class  debts,  which  had  not 
been  formally  decided  on  when  the  auditor  and  comptroller  made 
their  reports. 

It  also  passed  a  law  authorizing  a  sale  to  the  amount  of  a  mil 
lion  of  the  bonds,  and  another  appropriating  so  much  of  the  money 


THE  FISCAL  HISTORY  OF  TEXAS.  207 

received  from  the  United  States  as  might  be  necessary  to  the  pay 
ment  of  the  current  expenses  of  the  State  Government  for  two 
years  to  come. 

Just  before  the  Legislature  adjourned,  Mr.  Shaw,  the  comp 
troller,  who  had  been  sent  to  Washington  City  as  agent  of  the 
Texan  Government,  arrived  at  Austin  with  the  bonds  to  the  amount 
of  five  millions,  and  the  interest  that  had  accrued  thereon,  to  the 
amount  of  $250,000,  in  gold.  The  members  received  their  pay 
out  of  this  gold,  and  went  rejoicing  to  their  homes. 

The  treasurer  then  commenced  making  payments  in  gold  ;  but 
as  his  coffer  soon  gave  signs  of  exhaustion,  he  began  (with  the 
sanction  of  the  other  high  officers  of  State)  to  pay  the  public 
creditors  in  United  States  bonds  at  three  per  cent,  premium. 

A  sale  of  bonds  to  the  amount  of  upwards  of  $800,000  was 
afterwards  effected  at  a  premium  as  high,  in  some  cases,  as  five 
per  cent.,  and  thus  Texas  realized  an  additional  profit. 


CHAPTER    XXX. 

PROCEEDINGS  OF  THE  THIRTY-SECOND  CONGRESS  OF  THE  UNITED 
STATES :    FIRST  SESSION,  1851-52. 

Diversified  action  of  the  creditors — Report  to  United  States  Senate  by  Mr.  Pearce, 
of  Maryland — Motion  by  Mr.  Mason,  of  Virginia — Remarks  of  Messrs.  Houston, 
Pearce,  Butler,  Pratt,  and  others — Present  condition  of  the  creditors  of  Texas — 
Distinction  between  debts  of  the  Republic  and  debts  of  the  State. 

THE  action  of  the  Legislature  of  Texas  had,  as  has  already  been 
observed,  the  effect  of  dividing  the  creditors  into  two  parties. 
Part  of  them  applied  to  the  Congress  of  the  United  States  for  pay 
ment  of  the  amounts  due  to  them.  Another  part  petitioned  the 
same  Congress  to  surrender  the  bonds  to  Texas  in  proportion  as 
releases  to  the  United  States  should  be  filed  at  the  Treasury  De 
partment. 

The  Finance  Committee  of  the  Senate,  to  whom  these  petitions 
were  referred,  after  duly  considering  the  same,  made  report, 
through  Mr.  Pearce,  of  Maryland,  on  the  17th  of  August,  1852. 


208  THE  FISCAL  HISTORY  OF  TEXAS. 

In  this  report,  the  committee,  after  showing  in  what  manner 
and  to  what  extent  the  United  States  had  become  responsible  to 
the  creditors  of  Texas,  recommend  the  passage  of  a  bill  for  issue 
of  stock  of  the  United  States  to  the  amount  of  eight  millions  and 
a  third,  bearing  an  interest  of  three  per  cent,  per  annum — the  said 
stock  to  be  paid  to  the  creditors  on  their  giving  receipts  in  full  and 
assignments  of  their  evidences  of  debt,  which  may  be  held  by  the 
United  States  as  a  set-off  to  the  claims  of  Texas  to  the  five  millions 
reserved  under  the  act  of  September,  1850.  This  report  is  so 
important  that  we  have  inserted  it  at  length  in  Appendix  V. 

When  the  report  was  laid  before  the  Senate,  no  remarks  were 
made  except  by  Mr.  Hunter,  of  Virginia,  one  of  the  members  of 
the  committee.  He  said  he  was  in  a  minority  as  respected  the  bill, 
but  that  pressing  duties  at  that  juncture  would  not  permit  him  to 
draw  up  a  counter  report. 

Nine  days  afterwards,  or  on  the  26th  of  August,  when  the 
general  Appropriation  Bill  was  under  discussion,  Mr.  Mason,  of 
Virginia,  proposed  an  amendment  to  it,  the  purport  of  which  was 
that  the  Secretary  of  the  Treasury  should  release  to  Texas  the 
reserved  bonds  in  proportion  as  the  creditors  of  Texas  should  file 
releases  to  the  United  States. 

Mr.  Mason,  in  supporting  this  amendment,  said  :— 

(l  I  am  told,  and  I  have  no  doubt  correctly,  that  the  State  of  Texas,  be 
fore  the  passage  of  the  act,  passed  a  law  determining  in  what  proportion 
she  would  pay  that  debt;  in  other  words,  that  it  should  be  scaled  at  pre 
scribed  rates.  I  have  not  felt  myself  at  liberty  to  enter  into  the  consider 
ation  of  the  subject  how  Texas  proposes  to  pay  the  debt.  Whatever  my 
opinions  may  be,  they  are  not  to  be  expressed  here.  She  is  to  determine 
for  herself,  upon  her  own  ideas  of  propriety,  what  to  do  with  her  creditors. 
I  have  nothing  to  do  with  that  subject.  My  object  alone  is  to  say  that  I 
do  not  believe  the  interests  of  the  United  States,  which  I  am  here  to  repre 
sent,  will  be  affected  by  authorizing  the  stock  to  be  issued  as  fast  as  the 
releases  come  in;  and  that  is  the  whole  object  of  the  amendment." 

Messrs.  Gwin  of  California,  Clemens  of  Alabama,  and  Bright 
of  Indiana,  opposed  the  discussion  of  the  amendment  on  the 
ground  of  want  of  time.  Mr.  Clemens  said : — 

f(  My  State  is  one  of  the  creditors  of  Texas.  We  are  willing  to  trust 
Texas.  We  believe  that  Texas  will  pay  us  :  at  all  events  we  are  willing  to 
trust  her." 

Mr.  Houston,  of  Texas,  supported  the  motion  of  Mr.  Mason, 


THE  FISCAL  HISTORY  OF  TEXAS.  209 

and  expressed  his  regret  that  the  subject  had  not  sooner   been 
submitted  to  the  Senate.     He  added  : — 

"  If  the  Senate  were  to  act  upon  it,  and  to  adopt  the  measure  now  pro 
posed,  I  believe  it  would  not  only  benefit  the  creditors  of  Texas,  but  it  would 
attain  all  the  ends  of  justice  that  they  can  ever  expect,  or  that  Texas,  can 
ever  accord  to  them,  which  will,  I  think,  be  complete.  Whether  they  will 
act  upon  it  or  not,  Texas  will  take  care  of  herself,  and  her  creditors,  too,  if 
she  can." 

The  debate  was  continued  by  Mr.  Pearce  of  Maryland.  He  said : — 

"  Mr.  President,  if  the  State  of  Texas  and  her  creditors  were  the  only 
parties  concerned,  I  should  not  be  inclined  to  offer  the  least  opposition  to  the 
amendment  of  the  Senator  from  Virginia.  But  the  Senate  must  all  know 
that  the  United  States  are  concerned,  directly  concerned;  that  it  was  the 
supposed  liability  of  the  United  States  which  induced  us  to  make  that  pro 
vision  in  the  bill  of  1850,  by  which  five  of  the  ten  millions  of  stock,  which 
the  bill  proposed  to  grant  to  Texas,  were  reserved  and  retained  in  the  Trea 
sury,  until  releases  should  be  filed  by  the  creditors  of  Texas,  of  a  certain 
class.  That  class  of  creditors,  as  the  Senate  will  remember,  were  those  who 
held  bonds  for  which  the  revenues  of  Texas,  arising  from  imports,  had  been 
pledged.  It  had  been  alleged  here  that  the  United  States  were  liable  for 
the  bonds  for  which  these  revenues  were  so  pledged.  Even  during  the  dis 
cussion  of  the  annexation  of  Texas,  I  well  recollect  that  the  honorable 
Senator  from  Massachusetts  (Mr.  Davis),  in  the  course  of  a  speech  which  he 
made  on  that  occasion,  produced  one  of  the  revenue  bonds  of  Texas,  held 
it  up,  showed  it  to  the  Senate  of  the  United  States,  and  urged  it  as  an 
argument  against  annexation  that  we  should  be  inevitably  obliged,  at  some 
future  day,  to  pay  that  class  of  debts,  at  all  events.  That  was  one  of  the 
considerations  which  induced  the  Congress  of  the  United  States  to  agree  to 
give  to  Texas,  by  the  bill  of  1850,  the  large  sum  of  $10,000,000.  It  was 
held  that  the  United  States  were  liable — at  all  events,  such  was  the  opinion 
of  a  great  many  persons,  and  probably  of  a  majority  of  Congress — because, 
if  the  United  States,  upon  the  annexation  of  Texas,  took  possession  of  the 
funds  which  were  pledged  by  that  Republic  to  one  class  of  her  creditors, 
they  must  take  those  funds  cum  onere ;  they  could  not  be  diverted  from  the 
purpose  to  which  they  had  been  pledged  by  the  Government  of  Texas;  and 
when  they  were  received  into  the  treasury  of  the  United  States,  the  United 
States  having  so  diverted  them  became  liable,  at  least  in  some  degree,  to 
the  parties  to  whom  those  bonds  were  pledged. 

"  Well,  sir,  that  being  the  case,  the  United  States,  having  that  view,  re 
served  the  five  millions,  and  declared  that  they  should  not  be  paid  over  to 
Texas  until  the  creditors  filed  their  releases.  It  is  manifest,  when  we  come 
to  consider  this  proposition,  that  we  are  considering  that  which  does  not  con 
cern  Texas  and  her  creditors  alone,  but  which  concerns  the  Treasury  of  the 
United  States.  Texas  has  passed  a  law  proposing  the  liquidation  of  her 
debt,  and  has  classed  her  creditors  variously. 

"  I  have  not  yet  ascertained  the  exact  amount  of  those  claims  for  which 
her  revenues  from  customs  were  specially  pledged  by  that  name,  or  gene 
rally  as  revenues,  or  as  being  made  receivable  in  payment  of  public  dues. 
The  Secretary  of  the  Treasury,  in  the  opinion  which  he  has  filed  on  this 
14 


210  THE  FISCAL  HISTORY  OF  TEXAS. 

case,  has  stated  that  he  supposes  that  the  class  of  claims  which  came  under 
that  description  are  not  to  be  confined  to  those  claims  for  which  the  reve 
nues  from  customs  were  pledged  on  the  face  of  the  bonds,  but  that  other 
classes,  also,  are  equally  pledged,  though  in  a  different  form.  For  example, 
some  of  these  obligations  of  Texas  are  made  receivable  for  all  public  dues. 
If  they  are  receivable  for  all  public  dues,  they  are  receivable  in  payment 
of  duties  on  imports;  and  if  so,  duties  on  imports  may  be  considered  as 
pledged  for  their  payment.  Texas,  by  the  act  of  their  Congress,  though  it 
does  not  appear  on  the  face  of  many  of  her  obligations,  pledged  all  her 
revenues  for  the  payment  of  those  obligations  prior  to  January,  1840.  Of 
course,  a  pledge  of  revenue  from  all  sources  included  a  pledge  of  revenue 
from  customs  just  as  effectually  as  if  that  source  of  revenue  was  specially 
named ;  since  otherwise  a  general  pledge  of  the  revenues  would  be  a  pledge 
of  no  particular  item  of  revenue  at  all.  These  are  classes  of  which  we 
were  not  aware  at  the  time  we  passed  the  act  of  1850.  These  classes 
amount  to  a  much  larger  sum  than  the  five  millions  reserved,  and  hence  it 
is  that  the  United  States  become  interested ;  for  these  different  classes  of 
claimants  amounting  to  more  than  five  millions,  it  follows  that,  if  we  allow 
these  claims  to  be  admitted  by  payment  to  one  portion  of  the  creditors,  still 
we  would  remain  liable  to  another  portion,  and  so  we  should  not  escape 
that  which  it  was  our  purpose  to  avoid  when  we  made  the  reservation. 

"  Texas  has  scaled  her  debts ;  that  is,  she  proposes  to  liquidate  them  by 
paying  some  creditors  the  par  value,  as  we  call  it,  or  the  ostensible  value, 
as  they  call  it  at  the  treasury  of  Texas ;  others  she  proposes  to  pay  at  the 
rate  of  seventy  cents  on  the  dollar;  another  class  at  fifty  cents;  and  an 
other,  I  think,  at  twenty  cents  on  the  dollar.  With  regard  to  some  of 
these  claims,  Texas  alleges  that  she  received  only  so  much  as  she  is  now 
willing  to  pay;  that  those  who  took  her  obligations  bought  them  under  par, 
or  advanced  less  than  their  nominal  amount.  Then  again,  in  regard  to 
some  classes,  it  is  impossible  to  ascertain  what  the  different  creditors  have 
advanced  on  those  bonds,  some  having  given  more,  and  others  less.  These 
Texas  has  averaged.  This  proceeding  is  not  satisfactory  to  those  who  have 
been  scaled  at  the  low  rate ;  and  they,  naturally  enough,  are  disposed  to 
hold,  not  Texas  only,  but  the  United  States  liable  for  the  whole  amount  of 
what  is  due  upon  the  face  of  the  bonds.  They  say,  and  it  is  very  difficult 
to  deny  it,  that,  at  the  period  when  they  took  those  obligations,  the  affairs 
of  Texas  were  in  a  very  critical,  if  not  almost  desperate  state ;  that  the 
reduced  rates  at  which  they  paid  for  their  bonds  was  but  fair,  when  you  con 
sider  the  risk  they  run;  and  they  say  that  they  are  entitled  to  all,  now  that 
Texas  has  got  out  of  her  difficulties,  and  especially  as  the  United  States 
have  in  some  measure  acknowledged  their  liability  for  them.  And  then, 
as  it  has  not  been  the  practice  of  the  Government  of  the  United  States  to 
scale  her  debts,  to  refuse  to  pay  her  liabilities  in  full,  it  is  difficult  for  us  to 
say  that  we  will  sanction  any  proceeding  by  which  payment  for  one  portion 
of  these  debts,  at  one  rate,  should  be  paid  at  the  treasury  at  a  rate  which 
will  leave  a  remainder  of  the  five  millions  insufficient  to  pay  the  other 
creditors  at  the  same  rate. 

"  I  wish  to  say  that  I  trust  these  remarks  will  not  be  considered  offensive 
to  Texas.  It  is  impossible  to  avoid  speaking  of  the  effect  of  the  scaling 
act;  but  neither  in  the  report  of  the  Committee  on  Finance,  nor  in  any  re 
marks  which  I  may  make,  is  there  any  desire  to  cast  any  reproach  upon 


THE  FISCAL  HISTORY  OF  TEXAS.  211 

that  State.  On  the  contrary,  I  have  endeavored  to  avoid  any  expression 
which  might  justly  cause  irritation. 

"  I  suppose  that,  if  you  adopt  this  proposition  of  the  Senator  from  Vir 
ginia,  the  consequences  would  be,  that  something  like  $1,800,000  would 
be  paid  out  of  the  treasury  of  the  United  States  in  favor  of  the  claimants, 
scaled  at  the  high  rate,  and  they  most  probably  would  be  satisfied;  but  those 
scaled  at  the  low  rates  would  be  utterly  dissatisfied ;  and  they  would  here 
after  be  calling  on  the  treasury,  and  calling  until,  at  last,  I  have  no  doubt, 
we  should  yield  to  their  demands,  and  exhaust,  not  only  the  whole  amount 
of  the  $5,000,000  left,  after  the  $1,800,000  were  paid,  but  even  $6,000,000 
or  $7,000,000,  to  which,  with  the  accumulated  interest,  in  the  course  of  a 
few  years,  the  remainder  of  the  debt  would  amount.  If  we  adopt  this 
amendment,  the  amount  remaining  of  the  $5,000,000  will  not  more  than 
one-half  satisfy  these  demands. 

"  Now,  will  the  United  States,  under  these  circumstances,  give  their 
sanction  to  a  proposition,  by  which  one  class  of  creditors,  having  quite  an 
equal  claim  upon  them  as  the  other  class,  shall  be  paid  at  the  treasury  out 
of  this  reserved  fund,  at  the  larger  rate  at  which  their  claims  were  scaled, 
and  leave  the  others  to  receive  the  reduced  rate  at  which  they  were  scaled, 
or  wait  an  indefinite  series  of  years,  besieging  us  all  the  time  for  the  full 
rate  which  they  say  they  have  the  right  to  demand,  and  which,  according 
to  our  usage,  we  have  not  a  right  to  deny  ?  If  we  are  not  prepared  to  say 
that  we  will  discriminate  between  the  classes  who  have  equal  claims  against 
the  United  States,  we  must  reject  this  amendment. 

"  The  Committee  on  Finance  have,  through  me,  submitted  a  proposi 
tion  which,  we  believe,  will  be  satisfactory  to  all  the  creditors  of  Texas. 
That  proposition  is  to  appropriate  $8,333,000  in  bonds,  bearing  an  interest 
of  3  per  cent.,  to  be  divided  equally  among  all  the  claimants,  according  to 
their  claims.  I  do  not  propose  now  to  vindicate  that  bill,  but  I  shall  be 
prepared  to  do  so  whenever  it  comes  up  properly.  We  hope  that  it  will 
prove  satisfactory  to  Texas,  as  we  are  sure  it  will  be  to  the  creditors.  But 
while  that  is  pending,  it  seems  to  me  that  we  can  scarcely,  without  entering 
into  its  consideration,  undertake  to  dispose  favorably  of  this  proposition  of 
the  Senator  from  Virginia.  I  will  not  pursue  the  debate  further.  I  have 
stated  these  considerations  in  order  to  show  the  difficulties  in  the  way  of 
the  adoption  of  the  proposition  of  the  Senator  from  Virginia." 

Mr.  Hunter,  of  Virginia,  preferred  the  amendment  offered  by 
Mr.  Mason  to  the  report  of  the  Finance  Committee,  but  he  did  not 
wish  the  general  appropriation  bill  encumbered  by  any  provision 
relating  to  the  debt  of  Texas. 

Mr.  Houston  said : — 

"Without  the  reservation  having  been  made  in  the  law  of  1850, 1  never 
should  have  supposed,  for  one  moment,  that  the  United  States  were  liable 
for  any  portion  of  the  debt  of  Texas.  Nor  do  I  believe  that  by  any  but  an 
open  declaration  of  theirs  can  they  even  assume  the  responsibility  of  her 
debts.  Texas  has  not  repudiated  any  of  her  liabilities.  She  has 

arranged  that  by  her  municipal  regulations.     She  had  a  right  to  do  that. 


212  THE  FISCAL  HISTORY  OF  TEXAS. 

*     She  is  competent  to  regulate  her  own  matters,  and  she  will  re 
serve  that  power,  let  the  United  States  take  what  action  they  please." 

Mr.  Bayard,  of  Delaware,  said  he  should  vote  against  the  amend 
ment,  because  there  was  no  time  to  discuss  the  principles  involved 
in  it,  and  the  relative  importance  of  the  two  propositions — this  and 
the  one  reported  by  the  Finance  Committee. 

The  debate  was  continued  by  Mr.  Butler,  of  South  Carolina, 
and  Mr.  Pratt,  of  Maryland,  whose  words  we  must  give  verbatim. 

"Mr.  BUTLER. — Mr.  President,  I  have  not  now  time  to  say  what  I  would 
wish  to  say  upon  this  subject,  but  I  will  say  one  thing  pretty  decidedly — 
that  I  think  Texas  ought  to  be  the  administrator  of  her  own  affairs;  and 
when  the  United  States  undertook  to  supervise  and  correct  her,  and  assume 
for  Texas  a  responsibility  which  she  is  not  disposed  to  assume  for  herself, 
it  is  the  climax  of  Federal  assumption. 

"Sir,  some  gentlemen  say  there  is  not  time  to  consider  this  subject; 
others  say  if  there  were  time  it  ought  not  to  be  considered  one  way  or  the 
other;  but  I  choose  to  say  that  there  is  time  enough  to  consider  this  in  any 
point  of  view  in  which  I  believe  the  subject  ought  to  be  considered;  and 
that  is,  to  allow  those  who  may  be  willing  to  receive  their  money  according 
to  the  scale  of  Texas,  to  come  in,  file  their  releases,  and  receive  their  money. 
What  objection  is  there  to  that?  That  is  the  object  of  the  amendment  of 
my  honorable  friend  from  Virginia. 

"There  is  now  an  injunction  upon  that;  and  upon  what  ground?  That 
by  delaying  this  subject,  and  managing,  perhaps,  upon  a  very  high  con 
sideration  of  political  morality — no  speculation,  of  course;  I  suppose  spe 
culation  has  nothing  to  do  with  this  subject — the  Federal  Government  is  to 
rebuke  Texas  by  saying  to  her :  '  You  have  not  scaled  your  debt  correctly, 
and  we  will  assume  to  honor  a  draft  which  you  do  not  choose  to  pay,  on  the 
ground  that  you  have  disgraced  yourselves/  That  is  the  amount  of  it. 
We  have  said  to  Texas:  *  Say  what  you  owe,  and  we  will  pay  it;  and  to 
save  ourselves  from  any  further  liability  hereafter,  we  will  give  you 
$5,000,000  positively,  and  $5,000,000  on  certain  conditions,  that  your  cre 
ditors  file  releases.'  Well,  all  do  not  come  in.  Here  are  women  and 
children  absolutely  perishing  because  they  have  not  liberty  to  come  in  and 
take  their  money;  and  then,  from  a  high  morality — political  morality,  of 
course — the  United  States  tell  Texas :  «  You  have  disgraced  yourselves  by 
the  manner  in  which  you  have  scaled  your  debts;  we  will  save  you  from 
disgrace  by  assuming  the  debt;  we  will  accept  the  draft  which  you  have 
dishonored/  I  do  not  stand  here  to  be  the  guardian  of  the  honor  of  Texas 
— not  at  all.  But  one  thing  is  very  certain ;  and  I  leave  the  proposition  to 
the  public  to  say  whether  there  is  more  political  morality  or  speculation 
in  it." 

"Mr.  PRATT. — Mr.  President,  if  I  admitted  the  obligation  supposed  to 
exist  by  the  Senator  from  South  Carolina  (Mr.  Butler),  I  should,  of  course, 
agree  with  him  in  opinion;  but  I  do  not  think  the  obligations  of  Texas  have 
anything  to  do  with  the  question  presented  by  this  amendment.  The  sole 
question  for  us  to  consider  is  whether  the  Government  of  the  United  States 
is  bound  for  all  these  debts. 


THE  FISCAL  HISTORY  OF  TEXAS.  213 

"  The  Senator  makes  light  of  the  proposition.  I  know  him  to  be  a  good 
lawyer,  and  I  venture  to  say  now  that  he  cannot  answer  the  argument  which 
so  humble  an  individual  as  myself  may  make  on  the  subject. 

"  Mr.  President,  I  do  not  propose  to  say  anything  as  to  the  honor  of 
Texan.  The  question  here  is  whether  the  United  States  are  liable  for  these 
debts  or  not.  If  the  United  States  be  answerable  for  them,  then  it  is  the 
honor  of  the  United  States,  not  the  honor  of  Texas,  that  we  are  to  consider. 
Now,  I  assume,  as  a  legal  proposition  which  my  honorable  friend  from  South 
Carolina  cannot  deny,  that,  whenever  any  one  State  becomes,  by  compact, 
amalgamated  with  another,  the  State  into  which  the  sovereignty  is  merged 
is  liable  for  all  the  obligations  of  the  government  thus  united  with  it. 

"  My  constituents  are  deeply  interested  in  this  question.  I  do  not  intend 
to  say  aught  against  Texas.  I  am  speaking  of  the  obligation  of  the  United 
States  to  pay  my  constituents  the  debt  which  I  believe  is  now  due  from  this 
government  to  them. 

" Texas  was  a  sovereign  State;  the  United  States  cannot  deny  that  pro 
position;  it  must  be  conceded  by  us,  at  least,  that  Texas  was  a  sovereign 
State.  She  has  yielded  that  sovereignty  to  the  United  States.  What,  per 
mit  me  to  ask,  was  pledged  for  the  payment  of  her  debts?  I  differ  here 
somewhat  from  my  honorable  colleague.  I  say  that  the  national  faith  of 
Texas,  her  faith  as  an  independent  nation,  was  pledged.  She  has  ceased  to 
exist  as  a  nation.  The  United  States  now  possess  that  former  sovereignty 
which  was  originally  pledged  by  Texas  for  the  payment  of  these  debts. 
Now,  I  say  that  it  is  a  proposition  of  national  law,  running  down  from  the 
first  elementary  works  to  the  latest  writer  on  the  subject,  that,  where  that 
case  exists,  where  the  sovereignty  of  one  State  has  been  merged  in  that 
of  another,  the  State  into  which  it  is  merged  is  liable  for  all  the  obliga 
tions  of  the  other.  I  hold  before  me  Rutherford's  Institutes,  who,  speaking 
of  the  effect  of  the  union,  by  compact,  of  two  States  into  one,  says: — 

"  i  Since  both  States  thus  continue  in  this  united  body,  and  neither  of 
them  ceases  to  exist,  the  rights  and  the  obligations  of  both  will  remain,  and 
will  become  the  rights  and  obligations  of  the  united  body — that  is,  whatever 
rights  belonged  to  each  State  separately  before  they  were  united  will  after 
wards  be  the  rights  of  the  collective  State ;  and  the  same  obligations  that 
each  State  was  under  separately  before,  the  collective  State  will  be  under 
afterwards.' 

"You  will  find  in  all  the  elementary  works  this  proposition  broadly  laid 
down,  and  it  is,  I  submit,  a  proposition  right  in  itself.  Texas  was  entitled 
to  enter  into  these  obligations.  She  was  a  nation,  existing  in  the  eyes  of 
the  civilized  world  as  a  nation,  when  she  entered  into  these  obligations." 

"Mr.  BAYARD. — Allow  me  to  ask  the  honorable  Senator  from  Maryland 
whether  he  argues  that  the  entire  nationality  of  Texas  was  all  amalgamated 
into  the  United  States?  Did  her  entire  sovereignty  pass  to  the  United 
States?  I  say  the  entire  nationality  of  the  nation  amalgamated  with  an 
other  must  be  destroyed  before  the  nation  into  which  it  is  amalgamated  is 
liable  for  the  debts  of  the  other." 

"  Mr.  PRATT. — The  Senator  says  that  the  entire  nationality  must  be  de 
stroyed.  Now,  I  say  the  entire  nationality  of  Texas  was  destroyed.  I  do 
not  mean  to  say  that  she  is  not  a  State  equal  to  any  in  this  Union.  I  am 
proud  to  consider  her  as  a  sister  State,  equal  to  any  other  State  in  the  Union. 


214  THE  FISCAL  HISTORY  OF  TEXAS. 

But  I  say  that  Texas  has  surrendered  the  entire  nationality  which  was 
pledged  for  the  payment  of  these  debts. 

"The  proposition  of  my  honorable  colleague  is  that  the  United  States 
are  bound  for  that  class  of  debts  for  which  she  had  pledged  her  revenue 
from  imposts,  and  which  were  of  course  expressly  ceded  to  this  Union  by 
her  becoming  a  member  of  it.  No  one  can  doubt  that  proposition.  My 
honorable  friend  from  South  Carolina  says  there  is  nothing  in  it;  but  he  ad 
duced  no  argument  to  show  it." 

"  Mr.  BUTLER. — I  had  not  time  to  do  so." 

"  Mr.  PRATT. — Nor  could  you,  if  you  had  time;  nor  can  any  man  living 
refute  the  proposition,  that,  so  far  as  the  obligations  of  Texas  were  secured 
by  her  revenues  from  imposts  which  have  been  surrendered  to  this  Union,  our 
government,  having  taken  those  revenues,  took  them  cum  onere,  and  are 
bound  for  the  debts  for  which  Texas  pledged  them.  But  I  go  further,  and 
I  say  that,  in  reference  to  all  the  debts  of  Texas  for  which  the  national  faith 
was  pledged,  we,  having  assumed  the  nationality  which  was  pledged  for 
their  payment,  assumed  the  debt. 

"  My  honorable  friend  from  Delaware  has  asked  me  whether  Texas  sur 
rendered  her  nationality — her  entire  revenue,  and  ability  to  pay,  which,  as 
a  nation,  she  possessed  antecedently  to  her  annexation  to  this  Union.  Well, 
I  say  that  she  has  ceased  to  exist  as  a  nation." 

"Mr.  BAYARD. — She  possesses  a  quasi  sovereignty." 

"  Mr.  PRATT. — We  have  peculiar  institutions.  The  sovereignty  which 
she  possesses  is  a  quasi  sovereignty :  but  the  sovereignty  which  she  had 
pledged  for  the  payment  of  these  debts  was  an  absolute  sovereignty,  and 
has  been  surrendered.  She  entered  into  these  debts  as  a  nation.  As  a  na 
tion  she  has  ceased  to  exist;  and  she  is  now  a  member  of  this  Union,  pos 
sessing,  as  my  friend  says,  a  quasi  sovereignty;  but  not  possessing  the  sove 
reignty  which  was  pledged  for  the  payment  of  those  debts.  It  is  sufficient, 
however,  for  the  purpose  of  this  argument,  to  show,  what  cannot  be  success 
fully  denied  by  any  one,  that  the  class  of  debts  embraced  by  the  amendment 
were  secured  by  an  express  pledge  of  revenues  of  Texas  which  have  been 
surrendered  to  the  United  States.  In  regard,  therefore,  to  the  class  of  debts 
affected  by  the  amendment  under  consideration,  Texas  has  surrendered  to 
the  United  States  the  revenues  which  she  had  pledged  for  their  payment; 
and  in  regard  to  them,  the  Senators  from  South  Carolina  and  Delaware  must 
admit  that  Texas  has  ceased  to  be  sovereign;  and  by  the  admission  neces 
sarily  inferred  from  their  argument,  we  (the  United  States)  are  answerable 
for  them,  the  thing,  the  revenue,  pledged  by  Texas  for  their  payment,  now 
belonging  to  the  United  States,  and  she  receiving  the  money  arising  from 
it.  This  proposition,  therefore,  with  due  submission  to  the  judgment  of 
others,  I  say,  cannot  be  successfully  denied  with  reference  to  that  class  of 
debts  intended  to  be  embraced  by  this  amendment,  because,  by  assuming 
the  means  which  Texas  pledged  for  their  payment,  the  United  States  with 
them  necessarily  assumed  the  payment  of  the  debt  for  which  those  means 
were  pledged." 

The  Senate  adjourned  without  taking  a  vote  on  the  question; 
and  for  the  present  the  condition  of  the  creditors  of  Texas  is  as 
follows : — 


THE  FISCAL  HISTORY  OF  TEXAS.  215 

With  claims  on  two  governments,  which  claims  are,  to  a  certain 
extent,  recognized  by  both,  they  are  paid  by  neither. 

Texas,  although  she  has  abundant  means,  will  not  pay  them  so 
much  as  one  cent  of  even  the  scaled  amount,  because  she  wishes 
them  to  unite  with  her  in.  forcing  the  United  States  to  give  up  the 
reserved  bonds. 

The  United  States  will  not  pay  them,  because  this  would  be  in 
reality  exacting  the  amount  from  her  twice.  If  she  should  make 
an  unconditional  surrender  of  the  bonds,  or  any  surrender  of  them 
whatever,  except  on  the  terms  stipulated  in  the  act  of  September, 
1850,  she  would  make  herself  liable  to  the  creditors  for  the  differ 
ence  between  the  scaled  and  the  original  amount  of  their  claims. 

One  class  of  creditors  join  with  Texas  to  wrest  the  reserved 
bonds  from  the  United  States  Government ;  but  they  show  by 
their  language  and  their  conduct  that,  if  the  United  States  should 
pay  the  others  in  full,  they  would  expect  to  be  paid  in  full  also. 
What  they  aim  at,  is,  to  be  paid  the  scaled  amount  by  Texas  now, 
and  the  residue  by  the  United  States  some  time  hereafter. 

What  the  result  will  be,  we  pretend  not  to  augur.  If  the  ques 
tion  could  be  kept  clear  of  all  others,  there  would  be  little  difficulty 
in  effecting  an  adjustment.  But  this  can  hardly  be  hoped.  Our 
leaders  of  all  parties  are  always  on  the  look-out  for  something  out 
of  which  to  make  political  capital.  It  was  of  very  little  importance 
to  the  great  body  of  the  people  of  the  United  States  where  the 
line  was  drawn  between  Texas  and  New  Mexico.  But  the  contro 
versy  on  this  question  (if  the  speech-makers  are  to  be  believed) 
brought  into  danger  the  very  existence  of  the  Union.  The  truth 
is  that  various  aspirants  for  public  honors  wanted  something  to 
quarrel  about,  and  if  they  could  have  found  no  better  subject  of 
dispute,  they  would  have  quarrelled  about  a  stick  or  a  straw.  Not 
a  few  of  them  seem  ready  at  any  time  "  to  bring  the  Union  into 
danger,"  so  far  at  least  as  can  be  done  by  their  speeches,  in 
order  that  they  may  afterwards  have  the  honor  of  saving  it  by 
other  speeches. 

Judging  by  past  experience,  there  is  little  hope  that  this  case 
will  be  decided  solely  on  its  merits.  Perhaps  the  doctrine  of 
"  State  Rights"  will  be  invoked  to  bring  it  within  the  limits  of  the 
political  arena.  If  so,  we  protest  against  any  such  abuse  of  what 
is,  when  properly  understood,  a  most  excellent  doctrine.  A  State 


216  THE  FISCAL  HISTORY  OF  TEXAS. 

has  an  undoubted  power  to  contract  debts,  and  pay  them  in  whole 
or  in  part,  or  not  at  all,  just  as  she  pleases;  and  the  United 
States  have  no  power  to  interfere.  So  a  State  may,  by  what 
General  Houston  is  pleased  to  denominate  "her  municipal  regu 
lations,"  call  in  her  evidences  of  public  debt,  and  scale  them  down 
to  one-half  of  their  original  amount.  She  may  call  them  in,  in 
this  way,  again  and  again,  till  finally  she  scales  them  down  to 
zero.  "  She  has  a  right  to  do  that."  "  She  is  quite  competent 
to  regulate  her  own  matters,"  and  in  this  way  "  to  take  care  of 
herself,  and  her  creditors  too;"  and  the  United  States  have  neither 
the  ability  nor  the  disposition  to  interfere  with  this  "  arrange 
ment."* 

*  Far  be  it  from  us  to  doubt  or  deny  the  sovereign  right  of  a  sovereign  State  to 
cheat  its  creditors.  This  is  an  attribute  of  sovereignty  which  the  States  have  never 
surrendered.  On  this  pointjwe  are  of  perfect  accord  with  Mr.  Mason  and  Mr.  Hun 
ter  of  Virginia,  Mr.  Butler  of  South  Carolina,  and  General  Houston  of  Texas.  But 
does  the  case  of  Texas  fall  strictly  within  the  limits  of  the  principles  laid  down  in 
our  text  ?  The  constitutional  right  of  a  State  to  repudiate  its  debts,  either  in 
whole  or  in  part,  we  freely  admit.  But  the  debts  in  question  are  not  the  debts  of 
the  State  of  Texas,  but  the  debts  of  the  Republic  of  Texas.  Some  of  the  citizens  of 
Texas  show  that  they  have  a  very  clear  notion  of  the  distinction,  when  they  say 
their  State  "  is  administering  on  the  effects  of  a  dead  Republic." 

The  State  has,  indeed,  assumed  the  debts  of  the  Republic,  for  in  her  constitution 
it  is  expressly  said  that  "  the  ordinance  passed  by  the  Convention  on  the  fourth  of 
July,  assenting  to  the  overtures  for  the  annexation  of  Texas,  shall  be  attached  to 
the  constitution,  and  form  part  of  the  same."  And  in  this  ordinance  (see  Appendix 
R)  these  debts  are  recognized,  and  a  guarantee  given  that  they  should  not  come 
against  the  United  States. 

Does  such  an  assumption  of  the  debts  of  the  Republic  by  the  State  give  the  latter 
the  right  "to  arrange  them"  "  by  municipal  regulations"  as  she  might  her  own 
proper  debts?  The  debts  were  incurred  by  the  Republic,  and  "defined"  by  the 
Republic.  As  so  "defined,"  they  were  assumed  by  the  State,  and  now  for  the  State 
to  attempt  to  "re-define"  them  seems  to  detract  somewhat  from  the  sovereignty  of 
the  Republic. 

It  is  evident  that  the  Congress  under  which  annexation  was  effected  was  aware 
of  the  distinction  between  the  debts  of  the  Republic  and  the  debts  of  the  State  of 
Texas.  They  knew  that,  according  to  the  laws  of  nations,  all  those  debts  for  which 
the  transferred  revenues  had  been  pledged  would,  without  some  express  stipulation 
to  the  contrary,  become  a  claim  against  the  United  States.  They,  therefore,  made 
it  an  indispensable  condition  that  the  State  of  Texas  should  assume  the  debts  of  the 
Republic  of  Texas. 

The  question  is  a  very  different  one  from  that  which  would  be  presented,  if  the 
debts  had  been  incurred  by  a  State  within  the  Union.  And,  perhaps,  even  as  mat 
ters  now  stand,  the  question  is  more  curious  than  useful.  The  United  States  Go 
vernment  took  the  initiative  in  annexation,  and  by  the  very  terms  it  proposed, 


THE  FISCAL  HISTORY  OF  TEXAS.  217 

The  United  States  leave  Texas  at  liberty  to  make  the  best  com 
promise  she  can  with  her  creditors.  But  the  case  of  the  United 
States  and  the  creditors  of  Texas  is  different  from  the  case  of  the 
United  States  and  Texas,  though  the  two  cases  are  necessarily 
connected.  If  Texas  will  not,  or  cannot  pay  the  holders  of  the 
evidences  of  her  circulating  debt,  the  United  States  are  bound  to 
pay  them.  And,  under  these  circumstances,  the  United  States  will 
not  surrender  the  bonds  till  the  creditors  shall  sign  the  required 
releases.  It  was  to  guard  against  such  a  contingency  as  has 
occurred  that  the  last  proviso  was  introduced  into  the  "  Bound 
ary  Act ;"  and,  as  Texas  freely  assented  to  this  proviso,  she  has 
no  right  now  to  object,  even  if  it  does  present  an  obstacle  to  her 
plan  of  coercing  her  creditors  into  a  compromise. 


CHAPTER    XXXI. 

TEXAN  PLEDGES  OF  FAITH  AND  TEXAN  BREACHES  OF  FAITH. 

Solemn  league  and  covenant  of  the  Provisional  Government — Audited  drafts — Five 
million  loan  act  and  supplement — Act  of  June  7,  1837,  for  consolidating  public 
debt — Treasury  notes — Act  of  1837  authorizing  receipt  of  audited  drafts  for  direct 
taxes — Act  of  1838  for  payment  of  interest  on  the  funded  debt — Treasury  bonds 
act— Funding  act  of  1840 — Act  to  repeal  the  act  providing  for  the  redemption  of 
promissory  notes — Act  for  the  issue  of  exchequer  bills — Resolution  of  annexa 
tion — Scaling  act  of  1848 — Act  barring  all  claims  not  presented  before  September, 
1850— Act  stopping  interest  after  July  1,  1850. 

IT  will  be  proper  to  give  a  summary  view  of  Texan  pledges  of 
faith  and  Texan  breaches  of  faith,  if  it  be  only  to  show  what  go 
vernments  will  promise,  and  what,  in  some  instances,  they  will  not 
perform. 

In  the  preamble  to  the  plan  of  a  Provisional  Government, 
adopted  in  November,  1835,  the  people  of  Texas  do  solemnly  de 
clare  : — 

admitted,  by  implication,  that  it  would  be  responsible  for  the  debts,  if  they  were 
not  paid  by  Texas.  In  the  "Boundary  Act,"  it  fully  and  positively  admits  its  re 
sponsibility  for  all  the  debts  for  which  the  transferred  revenues  had  been  pledged. 


218  THE  FISCAL  HISTORY  OF  TEXAS. 

"  6.  That  Texas  is  responsible  for  the  expenses  of  her  armies  now  in  the 
field. 

"  7.  That  the  public  faith  of  Texas  is  pledged  for  the  payment  of  any 
debts  contracted  by  her  agents. 

"  These  DECLARATIONS  we  solemnly  avow  to  the  world,  and  call  GrOD 
to  witness  their  truth  and  sincerity ;  and  invoke  defeat  and  disgrace  upon 
our  heads  should  we  prove  guilty  of  duplicity." 

This  is  a  solemn  league  and  covenant,  as  solemn  as  words  could 
make  it.  It  has  never  been  fulfilled.  The  expenses  of  the  army- 
then  in  the  field  were  paid  with  audited  drafts,  many  of  which 
were  afterwards  commuted  for  treasury  notes,  while  many  of  those 
treasury  notes  were  subsequently  exchanged  for  certificates  of 
stocks.  These  debts  have  been  so  mixed  up  with  the  other  debts 
of  the  Republic,  that  it  is  impossible  to  separate  them.  The  only 
way  in  which  the  Texans  can  fulfil  this  solemn  league  and  cove 
nant  is  by  paying  to  every  man  what  they  have  promised  to  pay. 

December  20,  1836,  an  act  was  passed  imposing  duties  on  im 
ports.  By  the  fourth  section  of  this  act,  it  was  declared — 

"  That  it  shall  be  the  duty  of  the  several  collectors  to  receive  the  orders 
of  the  auditor  upon  the  treasury  of  the  Republic  when  offered  by  importers 
in  payment  of  duties  at  the  time  of  importation/' 

This  was  followed  by  an  act,  June  12,  1837,  "  to  raise  a  revenue 
by  direct  taxation,"  one  provision  of  which  was  : — 

"  That  properly  audited  drafts  on  the  treasury  of  the  Republic  shall  be 
received  in  payment  of  taxes  imposed  in  this  bill,  except  on  billiard  tables, 
retailers  of  liquors,  and  nine-pin  alleys,  or  games  of  that  kind." 

By  these  two  acts,  Texas  gave  to  her  audited  drafts  a  greater 
value  than  they  would  otherwise  have  possessed,  and  caused  them 
to  pass  into  hands  that  otherwise  would  not  have  received  them. 
She  thus  entered  into  a  contract  with  the  holders  of  these  drafts 
to  take  them  in  payment  of  debts  due  to  herself.  By  another  act, 
passed  December  14,  1837,  she  violently  set  aside  this  contract, 
declaring  that  such  drafts  should  no  longer  be  so  received.  She 
made  the  holders  thereof  no  compensation  for  the  wrong  done 
them  ;  and  as  these  debts  have  become  so  mixed  up  with  other 
debts  subsequently  incurred  that  they  cannot  be  separated  from 
them,  the  only  way  for  her  to  do  justice  to  those  who  were  thus 
wronged  is  for  her  to  discharge  all  her  outstanding  obligations 
according  to  the  letter  of  the  contract. 


THE  FISCAL  HISTORY  OF  TEXAS.  219 

June  7,  1837,  was  passed  "an  act  to  authorize  the  consolida 
tion  and  funding  of  the  public  debt." 

The  preamble  was  in  the  words  following : — 

"Whereas,  it  is  deemed  expedient  to  consolidate  the  public  debt,  by  the 
creation  of  a  stock  fund  commensurate  therewith,  by  issuing  certificates  of 
stock  in  suitable  and  convenient  shares :  it  is  also  deemed  expedient,  in 
order  that  the  public  credit  be  sustained,  and  the  public  creditors  be  relieved 
by  the  payment  of  fair  interest  on  the  government  liabilities,  that  the  same 
be  thus  consolidated  and  placed  in  a  tangible  form,  so  that  the  interest  may 
be  annually  paid,  and  the  debt  secured  to  the  public  creditors  until  its  final 
redemption,  &c.  Therefore,"  &c. 

This  was  a  new  pledge  of  faith  to  the  public  creditors,  holding 
out  to  them  inducements  to  exchange  the  evidences  of  the  public 
debt  they  then  held  for  others  in  a  form  more  convenient  to  the 
government.  The  first  section  provided  that  these  certificates  of 
stock  should  bear  an  interest  of  ten  per  cent.,  payable  semi-annu- 
ally,  and  another  section  was  in  the  words  following : — 

"Be  it  further  enacted,  That  the  public  faith  is  hereby  pledged  for  the 
redemption  of  said  stock  agreeably  to  the  foregoing  provisions  ;  and  so  much 
of  the  public  revenue,  arising  from  imports  and  direct  taxation,  as  may  be 
necessary  to  meet  the  annual  interest  of  the  funded  debt,  is  hereby  appro 
priated  and  set  apart  for  that  special  purpose." 

These  pledges  have  been  violated: — 

1.  In  not  applying  the  revenues  from  imports  and  direct  taxa 
tion  to  the  payment  of  the  interest  on  this  funded  debt ;  but  in 
appropriating  them  to  the  current  expenses  of  the  government. 

2.  In  arbitrarily  declaring   that  interest  on  this  funded  debt 
should  cease  on  the  1st  of  July,  1850,  on  which  day  not  one  dol 
lar  of  the  principal  had  been  paid. 

3.  In  scaling  down  this  debt  to  seventy  cents  in  the  dollar,  which 
is  an  express  violation  of  the  letter  of  the  contract. 

June  9,  1837,  was  passed  "  an  act  authorizing  the  issuing  of 
the  promissory  notes  of  the  government,"  some  of  the  provisions 
of  which  were  as  follows: — 

"  That  the  said  notes  shall  be  payable  twelve  months  after  date,  and  shall 
draw  an  interest  of  ten  per  cent,  per  annum  from  date. 

"That  the  said  notes,  at  any  time  before  or  after  maturity,  shall  be  con 
sidered  as  cash,  and  shall  be  received  as  cash  for  all  dues  owing  or  coming 
to  the  government. 

"That  one-fourth  of  the  proceeds  arising  from  the  sales  of  the  lands 
contemplated  to  be  sold  by  an  act  of  this  Congress  shall  be  paid  into  the 
treasury,  to  be  paid  out  only  for  the  redemption  of  the  promissory  notes  of 
the  government. 


220  THE  FISCAL  HISTORY  OF  TEXAS. 

"That  the  President  is  authorized  to  sell  five  hundred  thousand  acres  of 
land-script,  the  proceeds  of  which  shall  be  paid  into  the  treasury,  to  be  paid 
out  only  for  the  redemption  of  these  promissory  notes  of  the  government." 

These  pledges  have  been  violated  : — 

1.  In  not  paying  the  notes  with  the  interest  thereon  in  twelve 
months  after  date. 

2.  In  arbitrarily  declaring  that  the  said  notes  should  not,  after 
Feb.  1,  1842,  be  receivable  in  all  payments  to  government,  and 
that  at  a  time  when  their  being  so  receivable  gave  them  the  little 
value  they  then  had  left. 

3.  In  not  setting  apart  one-fourth  of  the  proceeds  of  the  sale 
of  the  lands  for  the  redemption  of  these  notes,  but  in  appropriat 
ing  them  to  the  current  expenses  of  the  Republic. 

4.  In  appropriating  the  proceeds  of  the  land-script  above  men 
tioned  to  the  current  expenses  of  the  government,  instead  of  apply 
ing  them  to  the  redemption  of  these  notes. 

5.  In  arbitrarily  declaring  that  such  of  these  notes  as  remained 
unfunded  should,  after  January  1,  1841,  cease  to  bear  interest. 

6.  In  scaling  down  these  notes  to  fifty  cents  in  the  dollar. 
May  16,  1838,  was  passed  an  "  act  to  authorize  the  President 

to  negotiate  a  loan  on  the  bonds  of  the  government,  not  exceeding 
five  million  dollars,"  one  section  of  which  was  as  follows  : — 

"SECTION  7.  Be  it  further  enacted,  That,  for  the  punctual  payment  of 
the  interest  and  final  redemption  of  said  bonds,  the  public  faith  is  hereby 
solemnly  pledged." 

Such  a  pledge  covers  everything  a  government  possesses,  or  may 
hereafter  acquire. 

Comprehensive,  however,  as  was  this  pledge,  it  was  found  impos 
sible  to  borrow  money  under  it,  and  a  supplementary  act  was  passed 
January  22,  1839,  some  of  the  provisions  of  which  we  shall  intro 
duce  at  length. 

"  SECTION  4.  Be  it  further  enacted,  That  in  case  the  said  loan  of  five 
million  dollars,  or  any  part  thereof,  should  be  negotiated  by  virtue  of  the 
aforesaid  act  of  May  16,  1838,  in  addition  to  the  general  pledge  of  the  faith 
and  credit  of  the  Republic,  contained  in  said  act,  for  the  payment  of  the 
interest  and  redemption  of  the  principal  of  said  loan,  so  much  of  the  reve 
nues  of  the  Ptepublic  as  may  be  necessary  shall  be  set  apart  and  semi-annu- 
ally  remitted  to  the  Bank  of  the  United  States,  in  Philadelphia,  to  meet 
the  semi-annual  interest  on  any  bond  or  bonds  issued  under  said  loan.  And 
as  soon  as  the  government  shall  deem  it  expedient  to  sell  the  said  lands, 
of  the  proceeds  thereof  three  hundred  thousand  dollars  shall  be  annually 


THE  FISCAL  HISTORY  OF  TEXAS.  221 

appropriated  and  set  apart,  and  invested  in  public  securities  or  corporate 
stock,  to  form  a  sinking  fund  for  the  ultimate  redemption  of  the  aforesaid 
loan  of  five  millions  of  dollars,  which  said  appropriation  shall  be  continued 
annually  to  be  made,  until,  with  the  interest  accruing  and  accumulating  on 
the  same,  a  sum  shall  be  raised  equal  to  the  five  million  dollars,  or  any  part 
thereof  which  may  have  been  negotiated." 

These  pledges  were  further  strengthened  by  an  act  passed  Janu 
ary  14,  1840,  entitled 

"  An  act  to  provide  for  the  more  certain  operations  of  the  Sinking  Fund 
created  by  an  act  of  Congress  of  the  Republic  of  Texas,  passed  January  22, 
1839,  to  extinguish  the  five  million  loan  authorized  to  be  raised  under  two 
several  acts  of  Congress  of  November  18,  1834,  and  16th  of  May,  1838  ; 
and  such  further  loans  as  the  Republic  may  cause  to  be  negotiated,  and  for 
other  purposes." 

The  third  section  contains  the  following  provisions  : — 

"  SECTION  3.  Be  it  further  enacted,  That  in  case,  from  consideration  of 
public  convenience  or  policy,  it  shall  be  deemed  inexpedient  to  bring  the 
public  lands  into  the  market  on  or  before  the  1st  of  January,  1842,  or  that, 
when  so  brought  forward,  it  should  be  deemed  inexpedient  to  sell  them,  it 
is  hereby  declared  to  be  then  and  after  that  period  the  duty  of  the  Secretary 
of  the  Treasury  to  provide  from  other  sources  of  revenue,  and  to  pay  over 
to  the  aforesaid  Commissioners  of  the  Sinking  Fund,  the  full  sum  of  three 
hundred  thousand  dollars  in  the  instalments  before  mentioned,  or  such  sum 
as,  with  the  amount  realized  from  sales  of  public  lands,  shall  make  up,  at 
the  period  stated,  the  sum  of  three  hundred  thousand  dollars,  to  be  remitted 
to  the  agents  aforesaid,  or  wherever  the  said  loan  may  be  effected." 

Another  section  of  this  act  is  in  the  words  following : — 

"SECTION  15.  Be  it  further  enacted.  That  for  the  redemption  of  all  loans 
negotiated  by  the  authority  of  the  Republic  of  Texas,  independently  of  the 
reservation  of  the  Sinking  Fund,  the  proceeds  of  the  public  lands  generally, 
its  revenues  and  public  faith,  are  solemnly  pledged." 

Under  the  pledges  of  faith,  general  and  special,  contained  in 
these  acts,  bonds  were  negotiated  to  the  amount  of  $1,213,287  : 
namely,  $560,000  with  F.  Dawson  and  others,  $457,380  with  the 
U.  S.  Bank  of  Pennsylvania,  and  $195,907  with  J.  Holford  and 
others. 

These  pledges  of  faith,  general  and  special,  have  been  violated 
in  the  following  particulars  : — 

1.  So  much  of  the  revenues  of  the  Republic  as  was  necessary 
to  meet  the  semi-annual  interest  on  the  bonds  was  not  set  apart 
and  semi-annually  remitted  to  the  United  States  Bank  in  Philadel 
phia.  The  revenues  were,  on  the  contrary,  used  to  defray  the 
general  expenses  of  government. 


222  THE  FISCAL  HISTORY  OF  TEXAS. 

2.  The  government  did  not  deem  it  expedient  to  bring  the  pub 
lic  lands  into  the  market  on  or  before  June  1st,  1842,  and  yet 
the  Secretary  of  the  Treasury  did  not,  from  other  resources,  pay 
over  to  the  Commissioners  of  the  Sinking  Fund  the  full  sum  of 
$300,000  annually. 

3.  In  a  subsequent  year,  the  government  did  deem  it  expedient 
to  sell  a  portion  of  the  public  lands,  and  made  a  most  excellent 
sale  to  the  amount  of  $10,000,000  ;  and  yet  it  did  not  appropriate 
and  set  apart  annually  $300,000  of  the  proceeds  thereof  for  the 
redemption  of  these  bonds,  principal  and  interest. 

4.  These  pledges  have  been  further  violated  in  scaling  down  the 
debt  to  fifty  cents  on  the  dollar,  in  direct  violation  of  the  letter  of 
the  contract. 

5.  They  have  also  been  violated  in  arbitrarily  declaring  that 
interest  on  this  debt  should  cease  on  the  1st  of  July,  1850,  when 
not  one  dollar  of  it  had  been  paid. 

February  5th,  1840,  was  passed  "  an  act  for  creating  funds  for 
the  support  of  government  for  the  year  1840." 

SEC.  1.  Bonds  to  be  issued  of  the  denomination  of  $100,  $500,  and 
$1000,  "bearing  an  interest  of  eight  per  centum  per  annum,  payable  in 
gold  and  silver." 

"SEC.  3.  Be  it  further  enacted,  That  the  bonds  before  referred  to  shall 
be  at  all  times  receivable  by  any  collector  of  revenue,  or  at  the  Treasury 
Department,  in  payment  of  any  debt  to  the  government,  or  any  duties  by 
impost  or  direct  taxation,  for  the  amount  value  of  such  funds,  and  the  in 
terest  which  may  have  accrued  thereon." 

-  "  SEC.  4.  Be  it  further  enacted,  That  for  the  payment  of  the  interest  on 
the  bonds  before  referred  to,  the  revenue  accruing  from  license-tax,  and  the 
tax  on  personal  property,  is  hereby  set  apart  for  that  purpose." 

The  pledges  of  faith  herein  given  have  been  violated  : — 

1.  In  not  paying  the  interest  on  these  bonds  in  gold  and  silver  ; 
no,  not  so  much  as  for  one  half  year. 

2.  In  appropriating  to  other  purposes  the  proceeds  of  the  license- 
tax  and  the  tax  on  personal  property,  instead  of  applying  them 
exclusively  to  the  payment  of  interest  on  these  bonds. 

3.  In  declaring  that  these  bonds  should  not  be  receivable  for 
duties  or  taxes  after  February  1,  1842,  by  which  they  were  de 
prived  of  the  little  value  that  then  remained  to  them. 

4.  In  arbitrarily   determining  that  not    one  cent   of  interest 
should  be  paid  after  July  1st,  1850,  though  not  one  dollar  of  the 
principal  of  these  bonds  had  then  been  discharged. 


THE  FISCAL  HISTORY  OF  TEXAS.  223 

5.  In  scaling  down  these  bonds  to  twenty  cents  in  the  dollar. 

February  5th,  1840,  was  passed  "  an  act  to  provide  for  the  re 
demption  of  the  promissory  notes  of  the  government  now  in  circu 
lation,  and  for  funding  other  liabilities  of  the  government." 

SEC.  1  required  blanks  to  be  provided  for  sums  of  $100,  $500,  and 
$1000,  transferable  by  simple  indorsement. 

"  SEC.  2.  Be  it  further  enacted,  That  all  sums  of  the  promissory  notes 
of  this  government  in  circulation,  which  shall  be  presented  to  the  stock 
commissioner  prior  to  the  first  day  of  July  next  ensuing  (if  in  sums  to  suit 
the  denominations  of  the  certificates),  shall  be  admitted  for  funding,  and 
certificates  of  stock,  as  before  provided,  shall  be  issued  to  the  holder  or 
holders  of  such  promissory  notes  for  the  amounts  so  presented ;  which  cer 
tificates  so  issued  shall  bear  on  them  an  annual  rate  of  interest  of  ten  per 
cent.,  payable  semi-annually  in  gold  or  silver  at  the  Treasury  Department. 

"  SEC.  3.  Be  it  further  enacted,  That  all  other  liabilities  of  the  govern 
ment,  which  may  have  been  properly  and  regularly  audited,  shall  be  admit 
ted  for  funding,  and  certificates  for  the  same  shall  be  issued  by  the  stock 
commissioner,  bearing  the  same  rate  of  interest  of  ten  per  cent.,  and  pay 
able  semi-aunually  in  gold  or  silver. 

"SEC.  4.  Be  it  farther  enacted,  That  from  and  after  the  first  day  of  July 
next  ensuing,  the  promissory  notes  of  the  government,  which  may  be  pre 
sented  for  funding,  shall  only  be  entitled  to  receive  from  the  stock  com 
missioners  certificates  of  stock  bearing  a  rate  of  interest  of  eight  per  cent, 
per  annum,  interest  payable  semi-annually  in  gold  and  silver." 

There  was  something  arbitrary  in  requiring  men  who  had  notes 
bearing  an  interest  of  ten  per  cent,  to  bring  them  in  prior  to  the 
1st  of  July,  1840,  under  penalty  of  having  the  interest  on  the 
certificates,  for  which  they  were  to  be  exchanged,  reduced  to  eight 
per  cent.  But,  waiving  this,  the  pledges  of  faith  contained  in 
this  act  have  been  violated  in  the  following  particulars : — 

1.  In  not  paying  the  interest,  semi-annually,  in  gold  and  silver, 
as  promised,  not  even  for  one  half  year. 

2.  In  arbitrarily  declaring  that  interest  on  these  certificates 
should  cease  on  the  1st  of  July,  1850. 

3.  In  scaling  down  the  face  of  these  certificates  to  30  cents  in 
the  dollar. 

Feb.  5,  1841,  was  passed  "  an  act  to  repeal  an  act  to  provide 
for  the  redemption  of  the  promissory  notes." 

"  That-  from  and  after  the  passage  of  this  act,  so  much  of  the  above  act 
as  relates  to  the  bonding  or  funding  of  the  promissory  notes  or  liabilities  of 
the  government  be,  and  the  same  is  hereby  repealed." 

This  left  the  holders  of  "red  backs"  and  of  unfunded  audited 
paper,  without  even  the  promise  of  interest,  though  they  were,  in 


224  THE  FISCAL  HISTORY  OF  TEXAS. 

justice,  as  much  entitled  to  such  promise  as  the  other  creditors  of 
government. 

Jan.  19,  1842,  was  passed  "an  act  to  authorize  the  President 
to  issue  exchequer  bills,  and  to  declare  what  shall  be  receivable  in 
payment  of  taxes  and  duties  on  imports." 

"  SEC.  1.  Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the 
Republic  of  Texas  in  Congress  assembled,  That,  from  and  after  the  first  day 
of  February  next,  it  shall  not  be  lawful  for  any  collector  of  customs  of  this 
Republic  to  receive  in  payment  of  imposts  or  duties  upon  goods,  wares,  and 
merchandise  imported  into  this  Republic,  after  the  day  above  specified,  any 
thing  but  gold  or  silver,  or  the  exchequer  bills  hereinafter  authorized  to  be 
issued. 

"SEC.  2.  Be  it  further  enacted,  That  it  shall  not  be  lawful  for  the  sheriff 
and  collectors  of  direct  taxes,  to  be  assessed  for  the  year  1842,  and  all  sub 
sequent  years,  to  receive  anything  in  payment  of  such  taxes  except  gold  or 
silver,  or  the  exchequer  bills  authorized  to  be  issued  by  the  provisions  of 
this  act. 

^sjs****** 

"SEC.  9.  Be  it  further  enacted^  That  all  land-dues  (except  the  land-tax) 
and  all  payments  for  patents  be  made  receivable,  as  heretofore,  in  the  lia 
bilities  of  the  government. 

"SEC.  10.  Be  it  further  enacted,  That  all  laws  heretofore  passed,  author 
izing  the  issue  and  reissue  of  promissory  notes,  and  their  reception  in  pay 
ment  of  duties  or  taxes  hereafter  to  be  assessed,  be,  and  the  same  are  hereby 
repealed." 

Necessity  led  to  the  passage  of  this  act ;  but  that  did  not  make 
it  the  less  a  violation  of  public  faith.  The  promissory  notes  had 
been  issued  with  a  proviso  that  they  were  to  be  received  in  pay 
ment  of  all  dues  to  government.  This  provision,  on  principles 
of  equity,  should  have  remained  in  force  till  all  the  notes  were 
redeemed.  Depriving  them  of  the  quality  which  gave  them  their 
chief  value  was  a  manifest  injustice  to  the  public  creditors. 

It  was  not  long  before  the  holders  of  exchequer  bills  received 
much  the  same  treatment  that  holders  of  treasury  notes  had  ex 
perienced.  July  29,  1842,  an  act  was  passed  "  to  regulate  the 
collection  of  import  duties,"  two  of  the  sections  of  which  we  shall 
give  in  full:  — 

"  SECTION  1.  Be  it  enacted,  That  the  collectors  of  revenue  are  hereby  re 
quired,  from  and  after  the  passage  of  this  act,  to  receive  the  exchequer  bills, 
in  the  collection  of  impost  and  tonnage  duties,  only  at  the  current  rates  at 
which  such  bills  are  selling  in  the  market. 

"  SECTION  4.  Be  it  further  enacted,  That  all  sheriffs,  clerks,  and  post 
masters  throughout  the  Republic  are  hereby  authorized  and  required  to 
collect  the  direct  and  license-taxes  and  postages  in  accordance  with  the 
provisions  of  this  act/7 


THE  FISCAL  HISTORY  OF  TEXAS.  225 

This  was  a  violation  of  the  act  passed  only  six  months  before, 
which,  if  it  meant  anything,  meant  that  exchequer  bills  should  be 
received  at  their  face  value  for  public  dues. 

March  20, 1848,  an  act  was  passed  "  to  provide  for  ascertaining 
the  debt  of  the  late  Republic  of  Texas."  And  February  9,  1852, 
was  passed  "  an  act  confirming  the  action  of  the  auditor  and 
comptroller  under  the  provisions  of  an  act  of  the  Legislature  to 
provide  for  ascertaining  the  debt  of  the  late  Republic  of  Texas, 
approved  March  20,  1818,  and  the  act  supplementary  thereto, 
approved  February  8,  1850." 

From  beginning  to  end,  these  acts  were  violations  of  the  public 
faith,  as  they  provide  for  the  scaling  of  the  debts,  contrary  to  the 
very  face  and  tenor  of  the  evidences  of  these  debts.  Every  trea 
sury  note,  every  bond,  every  certificate  of  stock,  every  audited 
draft  she  issued  was  a  pledge  of  the  public  faith  of  Texas.  Just 
so  many  pledges  of  faith  as  she  gave,  just  so  many  did  she  violate 
when  she  scaled  them  down  below  the  contract  amount. 

February  8,  1850,  an  act  was  passed  extending  the  provisions 
of  the  act  of  March  20,  1848,  to  the  first  Monday  in  September, 
1850,  and  declaring  that  "  all  claims  not  presented  by  that  time 
shall  be  barred." 

Texas  has  no  right  to  bar  the  claims  of  such  of  her  creditors  as 
may  not  choose  to  submit  to  her  scaling  system.  On  principles  of 
equity,  these  claims  will  remain  in  full  force  against  her,  though 
a  dozen  legislatures  should  each  in  succession  determine  that  they 
should  be  barred. 

February  11, 1850,  was  passed  "  an  act  to  provide  for  the  liqui 
dation  of  the  public  debt  of  the  late  Republic  of  Texas."  The 
sixth  section  enacts 

"  That  all  liabilities  of  the  late  Republic  of  Texas,  whether  the  same 
have  or  have  not  been  presented  to  the  auditor  and  comptroller  under  the 
provisions  of  the  l  act  to  provide  for  ascertaining  the  debts  of  the  late 
Republic  of  Texas,  approved  March  20,  1848/  shall  cease  to  draw  interest 
from  and  after  the  first  day  of  July,  1850." 

If,  of  a  debt  matured,  full  payment  is  not  made  when  demand 
ed,  interest  is,  on  principles  of  equity,  due  on  that  debt  till  it 
shall  be  paid  in  full.  The  debtor  has  no  right  to  say  to  the  cre 
ditor,  "  I  will  not  pay  you,  neither  will  I  pay  interest  longer  than 
to  me  seems  fit." 
15 


226  THE  FISCAL  HISTORY  OF  TEXAS. 

Therefore,  notwithstanding  this  enactment,  the  debt  of  Texas 
goes  on  accumulating  at  the  rate  of  ten  per  cent,  per  annum,  and 
will  go  on  thus  accumulating  till  either  she  or  Congress  shall  pay 
in  full  the  debts  for  which  the  revenues  were  pledged. 

We  pass  next  to  the  pledges  of  faith  Texas  has  given  in  relation 
to  these  debts  in  her  compacts  with  the  United  States. 

In  the  resolution  of  annexation,  to  which  Texas  gave  her  most 
cordial  assent,  it  was  expressly  provided  that  said  State 

"  Shall  also  retain  all  the  vacant  and  unappropriated  lands  lying  within 
its  limits,  to  be  applied  to  the  payment  of  the  debts  and  liabilities  of  Texas; 
and  the  RESIDUE  of  said  lands,  after  discharging  said  debts  and  liabilities, 
to  oe  disposed  of  as  said  State  may  direct,  but  in  NO  EVENT  are  said  liabili 
ties  to  become  a  charge  against  the  United  States  Government." 

Here  were  two  distinct  pledges ;  first,  that  the  public  lands  of 
Texas  should  be  applied  exclusively  to  the  payment  of  the  debts 
of  Texas,  till  the  whole  should  be  discharged ;  secondly,  that  in 
no  event  should  these  debts  become  a  charge  against  the  United 
States. 

Both  these  pledges  have  been  violated. 

Texas  has  appropriated  her  public  lands  for  the  promotion  of 
internal  improvements  and  other  objects  just  as  freely  as  she  could 
have  done  had  no  such  pledge  been  made.  Every  inch  of  her 
public  domain  is  mortgaged  to  her  public  creditors,  and  she  has 
no  right  to  give  or  grant  one  acre,  except  for*  the  purpose  of  re 
deeming  this  and  other  mortgages. 

The  second  pledge  has  also  been  violated.  Texas  has  suffered 
her  debts  and  liabilities  to  come  against  the  Government  of  the 
United  States,  and  that,  even  after  the  United  States  had  appro 
priated  ten  million  dollars  for  the  express  purpose  of  paying  these 
very  debts. 

The  compact  entered  into  between  the  United  States  and  Texas, 
in  the  "Boundary  Act,"  has  also  been  violated. 

It  is  evident,  from  the  terms  of  that  act,  that  its  intent  was 
that  the  five  millions  paid  over  unconditionally  should  be  applied 
to  the  redemption  of  those  debts  for  which  the  United  States  were 
considered  liable.  But  Texas  applies  part  of  the  money  to  the 
redemption  of  her  "domestic  debt,"  for  which  the  United  States 
were  in  no  way  responsible ;  another  part  to  the  payment  of 
the  expenses  of  her  State  Government ;  and  not  one  dollar  to 


THE  FISCAL  HISTORY  OF  TEXAS.  227 

the  redemption  of  the  debt   for   which   the  revenues   had  been 
pledged  ! 

Admit,  by  way  of  argument,  that  Texas,  as  a  sovereign  State, 
has  a  sovereign  right  to  violate  her  contracts  with  her  private 
creditors,  she  has  no  right  thus  to  violate  her  compacts  with  the 
United  States. 


CHAPTER    XXXII. 

GENERAL  VIEW  OF  CURRENCY  IN  TEXAS. 

"  Hammered  dollars"  the  chief  currency  of  Texas  previous  to  the  revolution — Influx 
of  bank-notes  from  the  United  States  in  1835-37 — "Shin-plasters" — Treasury 
notes,  first,  second,  and  third  issues — Evil  consequences  thereof — Exchequer 
bills— Gross  amount  of  circulating  paper — Bank  of  Agriculture  and  Commerce — 
Texas  Railroad,  Navigation,  and  Banking  Company — Other  bank  projects — Laws 
'  of  the  Republic  and  the  State,  and  constitutional  provisions  to  prevent  the  issue 
of  circulating  paper — "Mills's  money" — A  little  paper-money  panic  in  Texas — 
Good  effects  of  the  hard-money  laws  of  Texas — Efforts  to  change  the  constitution 
so  as  to  allow  of  paper-money  banking. 

THAT  the  reader  may  have  a  clear  view  of  the  changes  in  cur 
rency  that  have  taken  place  in  Texas,  it  will  be  necessary  to  bring 
together  various  facts  scattered  through  different  chapters,  together 
with  others  which  could  not  before  be  conveniently  introduced. 

While  Texas  was  a  part  of  Mexico,  the  currency  consisted  of 
gold  and  silver,  with  a  sprinkling  of  the  notes  of  various  banks  of 
the  United  States.  As  the  civilized  population  was  small,  amount 
ing,  in  1834,  according  to  Mexican  official  statements,  to  no  more 
than  twenty-one  thousand,  no  large  amount  of  currency  of  any 
kind  could  have  been  required  for  the  transactions  of  business. 
Accordingly,  we  find  Almonte  declaring:  "  Money  is  very  scarce 
in  Texas  ;  not  one  sale  in  ten  is  made  for  cash.  Purchases  are 
made  on  credit,  or  by  barter,  which  gives  the  country,  in  its  trad 
ing  relations,  the  appearance  of  a  fair." 

An  old  Texan,  however,  assures  us  that  it  was  only  as  compared 
with  Mexico  that  money  was  scarce.  As  compared  with  most 
newly-settled  countries,  money  was  plenty  in  Texas.  A  great  part 


228  THE  FISCAL  HISTORY  OF  TEXAS. 

of  the  currency  consisted  of  "  hammered  dollars,"  that  is,  of  old 
Spanish  dollars,  from  which  the  royal  effigy  had  been  effaced  by 
the  Mexicans,  as  a  testimony  of  their  indignation  towards  their 
ancient  rulers.  This  "  hammered  money"  was  the  common  currency, 
but  time-contracts  were  made  in  "  eagle-money,"  by  which  were 
meant  new  Mexican  dollars,  which  were  valued  at  one  hundred 
cents,  while  the  "  hammered  dollars,"  though  containing  full  as 
much  silver,  were  valued  at  only  ninety  cents. 

At  Brownsville,  and  other  towns  on  the  Rio  Grande,  there  is 
much  of  this  "  hammered  money"  still  in  use.  But  there  a  different 
reason  was  given  for  the  stamp's  being  defaced.  It  was  done,  we 
were  told,  by  the  Mexicans,  "  in  order  to  keep  the  money  in  the 
country."  If  so,  they  act  on  much  the  same  principle  as  some  of 
our  own  people  who  are  now  endeavoring  to  deteriorate  the  silver 
coinage.  Their  object  is  to  keep  our  silver  money  in  the  country 
by  diminishing  the  quantity  of  pure  metal  in  our  half-dollars, 
quarter-dollars,  dimes,  and  half-dimes.  The  Mexicans,  with  the 
same  object  in  view,  did  not  diminish  the  intrinsic  value  of  their 
coin,  but  sought  to  prevent  its  exportation  by  effacing  the  stamp, 
which  was  the  certificate  of  its  value.  Of  the  two  plans  we  prefer 
the  Mexican. 

After  the  revolution  broke  out,  "hammered  money"  was  not  for 
a  long  time  the  chief  currency  of  the  Republic.  In  1835,  bank 
notes  began  to  come  in  freely  from  the  United  States,  more  freely 
in  1836,  and  still  more  freely  in  1837.  Then  the  banks  suspended 
specie  payments.  The  paper  of  most  of  the  banks  of  Mississippi, 
which  formed  much  of  the  currency  of  Texas,  depreciated  greatly, 
and  that  of  some  of  them  became  worthless.  Many  of  the  people 
of  Texas  suffered  severely  thereby,  but  their  aggregate  losses  did 
not  equal  their  aggregate  gains,  as  many  of  these  notes  had  been 
obtained  on  loans,  and  many  of  these  loans  were  never  repaid. 

To  these  notes  of  suspended  banks,  were  added  "  shin-plasters," 
or  notes  for  fractional  parts  of  the  dollar,  put  into  circulation  by 
individuals  and  municipalities.  The  issue  of  these  began  in  1837, 
and  continued  till  1840,  when  an  end  was  put  to  them  by  the 
bankruptcy  of  the  issuers. 

For  two  years  after  the  revolutionary  outbreak,  or  from  the  fall 
of  1835  to  the  fall  of  1837,  bank-notes  and  "  shin-plasters"  formed 
almost  the  exclusive  medium  of  Texas.  The  government  had  issued 


THE  FISCAL  HISTORY  OF  TEXAS.  229 

a  large  quantity  of  drafts  on  its  empty  treasury,  and  these  were  a 
tender  for  public  dues;  but,  as  they  were  for  odd  numbers  of  dollars 
and  cents,  they  never  became  a  common  currency. 

The  first  issues  of  treasury  notes  were  in  November,  1837,  though 
some  of  the  notes  are  said  to  bear  date  in  September.  As  these 
were  for  round  sums  and  for  small  amounts,  they  were  much  better 
fitted  to  serve  the  purposes  of  a  circulating  medium  than  were 
the  audited  drafts.  As  the  notes  of  the  banks  of  the  United  States 
were  of  almost  as  many  different  values  as  the  banks  that  issued 
them,  the  want  was  sensibly  felt  of  some  one  medium  that 
should  have  one  value.  As  the  treasury  notes  bore  on  the  face  an 
interest  of  ten  per  cent.,  this  was  an  inducement  to  hoard  them,  on 
the  part  of  such  Texans  as  could  afford  it;  and  this,  also,  gave 
them  a  market  in  the  United  States. 

Through  these  causes  combined,  as  explained  at  length  in  a 
preceding  chapter,  these  notes  were  kept  at  par  with  specie,  or 
nearly  at  par,  for  several  months,  and  till  the  issues  exceeded  half 
a  million.  They  then,  in  the  spring  of  1838,  began  to  depreciate, 
and  as  each  additional  emission  increased  the  depreciation,  they 
were,  in  January,  1839,  worth  no  more  than  forty  cents  in  the 
dollar. 

To  these  treasury  notes  bearing  interest,  the  first  issues  of  which 
were  known  as  the  " printed,"  and  the  second  as  the  "engraved," 
succeeded,  in  the  spring  of  1838,  treasury  notes  bearing  no  in 
terest,  and  which  were  familiarly  known  as  "red  backs,"  on  account 
of  a  red  impression  on  the  back.  When  first  issued,  in  the  spring 
of  1839,  they  were  worth  thirty-seven  and  a-half  cents  in  the  dol 
lar,  but  in  1841  they  were  worth  no  more  than  twelve  to  fifteen 
cents.  In  the  winter  of  1841—42,  they  fell  to  ten  cents,  to  five 
cents,  to  four,  to  three,  to  two  cents  in  the  dollar.  Finally,  they 
became  worth  nothing  in  many  parts  of  Texas. 

Thus,  in  little  more  than  three  years,  the  treasury  note  system 
ran  its  course.  As  soon  as  it  was  fairly  established,  it  supplied 
Texas  with  its  only  general  circulating  medium.  Just  on  the  same 
principle  that  bank-notes  in  the  United  States  displace  gold  and 
silver,  did  treasury  notes  in  Texas  displace  bank-notes.  For, 
where  there  are  two  currencies  of  like  denominations,  that  of  the 
least  value  will  always  drive  the  other  out  of  circulation. 

The  evils  this  system  did  were  immense,  and  such  as  for  which, 


230  THE  FISCAL  HISTORY  OF  TEXAS. 

even  if  it  were  so  disposed,  the  government  could  afford  no  com 
pensation  to  the  sufferers.  A  receives  a  treasury  note  at  par.  He 
keeps  it,  for  a  time,  and  then  passes  it  to  B  at  ninety  cents  in 
the  dollar.  At  the  end  of  a  week,  a  month,  or  a  day,  B  passes  it 
to  C  at  eighty  cents.  So  it  passes  to  D,  E,  F,  G,  H,  I,  till,  finally, 
it  reaches  J  at  ten  cents.  J  passes  it  to  K  at  nine  cents,  who  passes 
it  to  L  at  eight  cents,  and  thus  it  passes  on  to  M,  N,  0,  P,  Q,  R, 
S,  till  it  reaches  T  at  one  cent.  In  this  way  have  the  poor  Texans 
been  "  scaled"  by  their  government,  and  this  may  be  one  reason 
that  they  wish  to  scale  others  in  their  turn. 

It  would  be  curious  to  calculate  the  amount  of  evil  that  may 
be  done,  and  the  number  of  persons  that  may  be  made  to  suffer, 
through  a  government  note  for  one  dollar.  It  is  true  that  a  fluc 
tuating  bank  currency  may  produce  the  like  evils,  but  that  we  have 
not  immediately  under  consideration.  One  thing  is  certain,  that, 
as  neither  bank  nor  government  can  afterwards  atone  for  such 
wrongs,  neither  bank  nor  government  ought  to  be  suffered  to  inflict 
them. 

Great,  however,  as  were  these  evils,  they  were  small  compared 
with  those  produced  by  continental  money,  for  that  was  made  a 
legal  tender,  and  supported  by  penal  enactments.  In  Texas,  on 
the  contrary,  every  man  was  at  liberty  to  refuse  or  receive  trea 
sury  notes  at  his  option.  As  the  most  general  circulating  medium, 
they  regulated  prices  ;  but,  as  it  was  known  that  they  were  con 
tinually  varying  in  value,  if  a  man  gave  a  note  payable  at  a  distant 
day,  it  was  understood  that  he  was  to  pay  it  in  silver,  or  in  so 
many  treasury  notes  as  might  then  be  the  equivalent  of  the  silver 
money  therein  expressed. 

To  the  treasury  notes  succeeded  the  exchequer  bills,  which  were 
but  treasury  notes  in  a  new  form.  These  were  so  few  in  number, 
and  so  variant  in  value,  that  they  never  became  a  common  circu 
lating  medium.  They  were  merchandise,  and  a  tender  to  govern 
ment  for  public  dues. 

By  this  time,  there  was  little  circulating  medium  of  any  kind  in 
Texas ;  but  this  was  no  great  calamity,  as  the  people  had  but  little 
left  to  circulate.  They  no  doubt,  however,  like  others  in  similar 
circumstances,  attributed  to  want  of  circulating  medium  the  evils 
they  suffered  from  want  of  circulating  capital. 

As  the  issues  of  audited  drafts  amounted  to   $7,834,207  57, 


THE  FISCAL  HISTORY  OF  TEXAS.  231 

those  of  treasury  notes  to  $4,717,939,  and  those  of  treasury  bonds 
to  $766,800,  or,  in  all,  to  $13,318,146  57,  if  paper  issues  could 
make  a  people  rich,  the  Texans  would  have  been  the  most  wealthy 
people  in  the  universe. 

What  they  suffered  from  this  policy  is  sufficiently  attested  by  a 
provision  inserted  in  their  State  Constitution,  adopted  August  27, 
1845,  which  declares  that 

"  In  no  case  shall  the  Legislature  have  power  to  issue  '  treasury  war 
rants/  t  treasury  notes/  or  paper  of  any  description  intended  to  circulate 
as  money." 

It  is  never  without  deep  experience  of  the  evils  of  paper  issues 
that  a  people  impose  such  restrictions  on  their  rulers. 

It  is  now  time  to  turn  our  attention  to  the  policy  of  Texas  con 
cerning  banks. 

It  has  already  been  mentioned  that  the  Congress  of  the  Repub 
lic  made  full  recognition  of  the  Coahuilan  decree  for  the  establish 
ment  of  the  Agricultural  and  Commercial  Bank,  and  also  that  it 
passed  an  act  to  incorporate  the  Texas  Railroad,  Navigation,  and 
Banking  Company,  with  a  capital  of  five  millions,  to  be  increased 
to  ten  millions,  and  with  a  charter  for  forty-nine  years.  Other 
schemes,  equally  magnificent,  were,  as  has  been  duly  recorded  in 
other  parts  of  our  history,  favorably  received  by  the  Texan  Con 
gress.  But,  about  this  time,  the  banking  system  of  the  United 
States  descended  with  a  mighty  crush;  and  this  produced  a  change 
in  the  minds  of  the  Texan  lawgivers.  On  the  14th  of  December, 
1837,  they  passed  an  act  by  which  it  was  made  unlawful  for  any 
person  or  persons  to  either  issue  or  put  in  circulation  any  printed 
or  lithographed  promissory  note,  under  a  penalty  of  not  less  than 
five  nor  more  than  fifty  dollars  for  each  offence.  A  like  penalty 
was  imposed  on  any  person  who  should  so  much  as  present  in  pay 
ment  for  debt,  or  for  the  purchase  of  property,  any  such  notes ; 
and  it  was  made  the  special  duty  of  all  grand-juries  to  inquire  into 
and  present  all  persons  offending  against  the  provisions  of  this 
act. 

Perhaps  this  law  was  intended  in  part  to  secure  an  exclusive 
field  for  the  circulation  of  treasury  notes,  by  forbidding  the  issue 
of  small  notes  by  individuals  and  municipalities. 

After  the  explosion  of  the  treasury  note  system,  an  act  was 
passed  February  3,  1841,  to  authorize  McKinney  and  Williams 


232  THE  FISCAL  HISTORY  OF  TEXAS. 

to  issue  their  notes  to  the  amount  of  thirty  thousand  dollars  for 
circulation  as  money;  but  a  declaration  was  added: — 

"  That  banking  privileges,  as  a  general,  rule,  being  inexpedient,  the  pri 
vileges  hereby  granted  to  McKinney,  Williams,  &  Co.  are  conceded  to  them 
in  consideration  of  their  having  made  large  advances  to  this  government  at 
an  early  period  of  its  existence/' 

The  next  law  that  we  can  find  having  a  bearing  on  the  subject, 
is  entitled  "  An  act  to  Suppress  Private  Banking,"  passed  February 
5,  1840.  In  this,  it  is  provided 

"  That  all  laws  granting  to  any  individual,  individuals,  or  corporations 
the  authority  to  issue  either  bills  or  promissory  notes,  to  pass  or  circulate  as 
money,  are  hereby  repealed/7 

For  each  offence  against  the  act,  the  penalty  was  a  fine  of  five 
hundred  dollars,  and  imprisonment  for  not  less  than  three  nor 
more  than  twelve  months;  and  it  was  made  the  special  duty  of 
the  judges  of  the  District  Court  to  give  the  act  in  charge  to  the 
grand-juries  of  the  several  counties,  at  the  beginning  of  each  term 
of  said  courts. 

This  act  took  from  McKinney,  Williams,  &  Co.  the  privilege 
conferred  by  the  law  of  February,  1841  (a  privilege,  by  the  way, 
of  which  they  could  not  avail  themselves),  but  it  did  not  repeal  the 
charters  of  the  Commercial  and  Agricultural  Bank,  or  of  the  Texas 
Railroad,  Navigation,  and  Banking  Company.  It  simply  deprived 
them  of  the  power  to  issue  paper  to  circulate  as  money,  but  left 
them  with  full  power  (if  so  be  they  had  any  legal  existence)  to  dis 
charge  the  functions  of  banks  of  deposit,  transfer,  discount,  and 
exchange. 

These  are  the  only  acts  relating  to  banking  that  appear  to  have 
been  passed  by  Texas  as  an  independent  empire ;  and  the  result 
was  that  Texas,  as  a  Republic,  had  no  banks  in  operation. 

To  prevent  their  suffering  in  future  such  evils  as  the  citizens  of 
other  parts  of  our  Union  have  been  subjected  to,  the  people  of 
Texas  embodied  the  following  provisions  in  their  State  Consti 
tution  : — 

"  ART.  VIII.  SECTION  28.  No  corporate  body  shall  hereafter  be  cre 
ated,  renewed,  or  extended,  with  banking  or  discounting  privileges. 

."SECTION  32.  The  Legislature  shall  prohibit  by  law  individuals  from 
issuing  bills,  checks,  or  promissory  notes,  or  other  paper,  to  circulate  as 
money/' 

These  provisions  are  sufficiently  stringent ;  some  of  them,  per- 


THE  FISCAL  HISTORY  OF  TEXAS.  233 

haps,  almost  too  much  so.  It  is  only  as  paper-money  factories 
that  banks  do  harm.  We  can  see  no  objection  to  banks  of  deposit, 
discount,  transfer,  and  exchange,  provided  they  operate  with  hard- 
money  only,  or  with  paper  which  shall  be,  dollar  for  dollar,  the 
representative  of  specie  actually  in  their  vaults.  But  the  Legis 
lature  of  Texas  is  by  the  constitution  prevented  from  establishing 
even  hard-money  banks. 

In  accordance  with  these  constitutional  provisions,  an  act  was 
passed  on  the  7th  of  April,  1846,  declaring  that 

11  No  person  or  persons  within  this  State  shall  issue  any  bill,  promissory 
note,  check,  or  other  paper,  to  circulate  as  money. 

"  Every  person  who  may  violate  this  act  shall  be  subject  to  indict 
ment  therefor,  by  a  grand-jury,  as  for  a  misdemeanor,  at  any  time  within 
twelve  months  after  so  offending;  and  shall  be  subjected  to  a  fine  of  not 
less  than  ten  dollars,  nor  more  than  fifty  dollars,  for  each  and  every  bill, 
promissory  note,  check,  or  other  paper,  issued  by  them  in  violation  of  the 
first  section  of  this  act." 

Another  act  was  passed,  nearly  two  years  afterwards,  or  on  the 
20th  of  March,  1848,  the  first  section  of  which  provides 

"  That  any  corporation,  company,  or  association  of  individuals  who  shall 
use  or  exercise  banking  or  discounting  privileges  in  this  State,  or  who  shall 
issue  any  bill,  check,  promissory  note,  or  other  paper  in  this  State,  to  cir 
culate  as  money,  without  authority  of  law,  shall  be  deemed  guilty  of  a  mis 
demeanor,  and  shall  be  liable  to  a  fine  of  not  less  than  two  thousand  dollars, 
nor  more  than  five  thousand  dollars,  which  may  be  recovered  by  a  suit  in 
the  District  Court,  in  the  name  of  the  State." 

The  second  section  makes  it  the  duty  of  the  attorney-general 
to  institute  suit  against  offenders,  makes  simple  service  of  citation 
sufficient  service,  and  provides  that,  in  any  judgment  that  may  be 
obtained,  execution  may  be  levied  upon  the  estate  of  the  corpora 
tion,  company,  or  association  of  individuals,  and  in  default  of  such 
estate,  on  the  estate  of  the  officers  of  such  corporation,  company, 
or  association. 

The  third  section  enacts  "  that  in  any  suit  instituted  under  the 
provisions  of  this  act,  either  party  may  appeal  to  the  Supreme 
Court  of  the  State,  and  no  bond  or  security  shall  be  required  of 
the  State  on  any  such  appeal." 

The  fourth  section  provides  that  each  and  every  month  that  any 
corporation,  &c.  shall  exercise  banking  or  discounting  privileges, 
shall  be  deemed  a  separate  oifence  ;  and  each  and  every  bill,  &c., 
issued  to  circulate  as  money,  shall  be  deemed  a  separate  offence. 


234  THE  FISCAL  HISTORY  OF  TEXAS. 

As  the  laws  of  the  Republic,  of  December  14,  1837,  and  Feb 
ruary  5,  1844,  remain  unrepealed,  they  would  seem  quite  sufficient, 
with  the  provisions  of  the  constitution,  and  the  acts  of  the  State 
of  April  7,  1846,  and  March  20,  1848,  to  put  an  end  to  paper- 
money  evils  in  Texas.  But  the  reader  may  be  disposed  to  ask  if 
these  various  provisions  produce  the  effect  intended,  for  he  is  well 
aware  that  laws  often  prove  nugatory,  sometimes  through  the 
faults  of  the  officers  whose  duty  it  is  to  execute  them ;  sometimes 
through  the  state  of  public  opinion  being  such  as  to  prevent  their 
proper  enforcement ;  sometimes  through  defects  in  the  mere  word 
ing  of  the  law ;  and  sometimes  through  a  neglect  to  provide  the 
necessary  auxiliary  means  to  carry  the  law  into  operation. 

We  answer  that  the  effect  intended  has  been  produced,  though 
not  to  the  whole  extent  that  the  framers  of  the  constitution  de 
sired. 

Through  some  mysterious  means,  the  Commercial  and  Agricul 
tural  Bank  has  been  brought  into  operation,  for  it  does  not  appear 
that  it  has  ever  been  certified  to  the  Executive  "that  one  hundred 
thousand  dollars  had  entered  its  vaults,"  and  this  was  an  indispens 
able  condition  of  its  charter.  A  writer,  in  the  sixth  volume  of 
De  Bow's  Commercial  Review,  states  that 

"Messrs.  J.  Lake  &  Co.,  by  means  of  the  credits  which  they  got  through 
the  Ohio  State  Bank  law,  started  three  other  Ohio  banks  (in  addition  to 
the  Bank  of  Wooster),  besides  buying  the  Mineral  Bank  of  Maryland  and 
a  bank  in  Texas.  '  The  foundation  of  the  whole  is  $171,900  of  stock 
owned  by  Lake  in  the  Wooster  Bank.  It  is  possible  that  not  a  cent  of 
money  was  paid  at  all,  but  stock  notes  given/  ': 

As  the  Commercial  and  Agricultural  Bank  is  the  only  bank  in 
Texas,  the  fair  inference  is  that  this  is  the  bank  affirmed  to  have 
been  bought  by  J.  Lake  &  Co.  But  this  is  inference.  Wherever 
it  obtained  the  means,  certain  it  is  that  the  Commercial  and  Agri 
cultural  Bank  commenced  operations  at  Galveston  some  six  years 
ago,  and  continues  them  to  this  day.  It  has  also  established  a 
branch  at  Brownsville,  with  the  view  of  circulating  its  paper  in  the 
adjoining  State  of  Tamaulipas.  But  the  Mexicans  will  have  none 
of  it.  They  prefer  their  own  defaced  silver  coin  to  any  "promises 
to  pay,"  however  prettily  they  may  be  adorned  by  the  art  of  the 
engraver. 

The  Attorney-General  of  Texas  has  been,  for  some  time,  con 
testing  with  the  bank  the  legality  of  its  existence;  but,  as  he  was 


THE  FISCAL  HISTORY  OF  TEXAS.  235 

the  private  counsel  of  the  bank  before  he  was  elevated  to  his  pre 
sent  dignity,  the  opinion  of  some  people  is  that  the  State  will  not 
gain  much  in  the  contest.  Texas  found  no  difficulty  in  abolishing 
the  privileges  which  the  Mexican  laws  conferred  on  the  empre- 
sarios,  or  contractors  for  settling  the  public  lands.  But  when  it 
comes  to  a  question  about  privileges  conferred  on  a  bank,  the  case 
is  very  different.  The  bank  then  proves  too  powerful  for  the  State, 
with  all  its  hard-money  laws,  and  its  hard-money  constitution. 

The  laws  of  Texas  are,  as  we  have  seen,  very  strict  in  regard  to 
paper  currency ;  but  a  certain  English  judge  once  said  that  he 
never  saw  an  act  of  Parliament  through  which  he  could  not  drive 
a  coach  and  four  horses,  and  our  paper-money  men  in  America 
can,  when  necessary,  drive  a  whole  ox  team,  horns,  hoofs,  and  all, 
through  acts  of  Assembly.  If  the  reader  will  scan  the  laws  of 
Texas  in  regard  to  paper  currency,  he  will  find  that,  though  they 
rigidly  prohibit  the  issue  of  bank-notes,  they  do  not  prohibit  their 
reissue,  much  less  the  simple  passing  of  notes  issued  by  banks  in 
another  State.  Neither  do  they  prohibit  any  citizen  of  Texas 
from  indorsing  such  issues,  although  such  indorsement  may  give 
them  a  currency  in  Texas  they  would  not  otherwise  obtain.  Penal 
acts  are  to  be  strictly  construed.  Constructive  offences  are  not  to 
be  admitted  in  a  Republic;  otherwise,  no  one  citizen  knows  how 
soon  he  may  be  arraigned  as  a  criminal. 

Taking  advantage  of  these  most  excellent  principles,  the  house 
of  R.  &  D.  G.  Mills,  of  Galveston,  have  for  years  been  in  the  habit 
of  indorsing  the  notes  of  the  Northern  Bank  of  Mississippi  at 
Holly  Springs,  and  thus  giving  them  a  currency  in  Texas,  as  the 
Texas  State  Gazette  expresses,  "not  for  the  purpose  of  making 
money,  but  to  facilitate  the  operations  of  their  own  business,  by 
affording  a  convenient  medium  of  circulation."  The  Bank  of 
Holly  Springs  is  of  very  doubtful  reputation,  the  notes  of  which 
would  never  of  themselves  have  obtained  currency  in  Texas.  But 
being  indorsed  by  what  was  long  regarded  as  the  richest  commer 
cial  firm  in  the  State,  they  passed  freely,  to  the  amount,  as  the 
Houston  Telegraph  supposes,  of  three  hundred  thousand  dollars, 
though  the  Austin  State  Grazette  asserts  "it  is  scarcely  possible 
tUat  there  ever  was,  at  any  one  time,  more  than  forty  thousand 
dollars  in  circulation." 

All  this  did  very  well  for  years  in  succession.    "Mills's  money,'' 


236  THE  FISCAL  HISTORY  OF  TEXAS. 

as  it  was  called,  was  regarded  as  being  as  good  as  gold  and  silver, 
or  even  better,  inasmuch  as  it  could  more  readily  be  carried  from 
place  to  place.  The  rest  of  the  story  we  will  let  the  editor  of  the 
Texas  State  Grazette  tell  in  his  own  words,  as  we  find  it  in  his 
paper  of  February  7,  1852,  premising  the  fact  that  Austin,  the 
home  of  the  editor,  is,  by  the  post-route,  two  hundred  and  fifty 
miles  inland  from  Galveston,  the  home  of  the  Messrs.  Mills. 

"  The  news  of  the  suspension  of  the  house  of  R.  &  D.  Gr.  Mills  was  re 
ceived  in  town  a  few  days  since,  and  of  course  created  no  little  excitement, 
as  the  bills  of  the  Northern  Bank  of  Mississippi,  bearing  their  indorsement, 
had  for  some  time  circulated  among  us  with  all  the  facility  of  gold.  The 
sudden  and  unexpected  announcement  of  this  fact  of  course  created  a  great 
revulsion,  and  for  a  time  all  confidence  was  destroyed  in  this  money  j  sub 
sequent  advices,  however,  and  the  opinion  of  men  acquainted  with  the  mem 
bers  of  this  house,  and  not  altogether  unadvised  of  their  true  condition, 
have  produced  a  considerable  modification  of  the  panic  and  a  restoration  of 
confidence." 

From  this  it  will  be  seen  that  the  people  of  Texas  have,  in  spite 
of  their  hard-money  laws  and  hard-money  constitution,  had  a  very 
pretty  little  paper-money  panic.  And  they  will  have  more,  unless 
those  whose  duty  it  is  to  administer  the  laws  shall  discover  that 
putting  foreign  bank-notes  in  circulation,  by  indorsing  them,  is  a 
mere  evasion  of  the  act  of  Assembly  which  forbids  the  emission  of 
paper  for  circulation.  By  the  method  they  pursued,  Messrs.  R. 
&  D.  G.  Mills  made  their  house  at  Galveston  a  branch  of  the  Bank 
of  Holly  Springs.  If  this  practice  is  tolerated,  other  "wild-cat 
banks"  will  have  their -branches  in  Texas.  The  Bank  of  Holly 
Springs  and  its  agents  will  not  be  suffered  to  monopolize  so  very 
profitable  a  business. 

It  is  to  be  observed  that  the  Messrs.  Mills  are,  as  are  also 
Messrs.  McKinney  and  Williams,  of  the  Commercial  and  Agricul 
tural  Bank,  very  amiable  men  in  the  private  walks  of  life,  and 
highly  meritorious  citizens,  who  rendered  great  aid  to  Texas  in  her 
hours  of  adversity.  But  they  would  add  greatly  to  the  esteem  in 
which  they  are  justly  held  by  their  fellow-citizens  if  they  would 
set  a  proper  example  of  obedience  to  those  provisions  of  the  law 
and  the  constitution  which  are  designed  to  insure  to  Texas  the 
benefits  of  a  sound  circulating  medium. 

Notwithstanding  the  subterfuges  by  which  they  are  violated  or 
evaded,  the  hard-money  laws  of  Texas  have  done  much  good.  The 


THE  FISCAL  HISTORY  OF  TEXAS.  237 

Commercial  Bank  has,  as  is  said  by  some,  not  more  than  fourteen 
thousand  paper  dollars  in  circulation,  and  if  the  editor  of  the  State 
G-azette  is  correct,  the  circulation  of  the  Holly  Springs  branch 
notes  hardly  amounts  to  twenty-five  thousand  dollars.  These  sums 
are  necessarily  conjectural :  but  it  is  agreed  on  all  hands  that  at  least 
nine-tenths,  perhaps  nineteen-twentieths,  of  the  circulating  medium 
of  Texas  consists  of  gold  and  silver.  The  notes  of  the  banks  of 
other  States  are  brought  into  Texas  by  immigrants  and  travellers, 
but  they  are  soon  sent  out  again  in  pay  for  commodities.  They 
form  no  permanent  part  of  the  circulating  medium  of  the  State; 
and  so  little  inconvenience  do  they  occasion  that,  within  the  bounds 
of  the  commonwealth,  there  is  not  one  broker,  exchange  merchant, 
or  other  person,  whose  business  is  to  buy  and  sell  bank-notes. 

To  this  exemption  from  the  curse  of  paper-money,  Texas  is  in 
part  indebted  to  her  situation.  If  she  had,  by  her  side,  a  petty 
State,  like  Rhode  Island,  with  a  hundred  petty  banks,  each  issuing 
petty  one  and  two  dollar  notes,  her  hard-money  laws  and  hard- 
money  constitution  would  avail  but  little.  The  public  good  would 
then  prove  no  match  for  private  cupidity.  But  Arkansas,  one  of 
the  States  adjoining  Texas,  has  no  banks,  and  Louisiana,  the  other 
adjoining  State,  permits  her  banks  to  issue  no  notes  of  a  less  de 
nomination  than  five  dollars. 

The  result  of  this  hard-money  policy  is  that  business  in  Texas 
rests  on  a  more  stable  foundation  than  it  does  in  many  other  parts 
of  the  Union.  That  it  is  absolutely  free  from  vicissitude  is  what 
we  do  not  assert.  That  would  be  impossible  in  a  State  containing 
some  two  hundred  thousand  inhabitants,  connected  by  strong  poli 
tical  and  commercial  ties  with  other  States  containing  upwards  of 
twenty  millions,  most  of  whom  are  subject  to  paper-money  vacilla 
tion,  as  certain,  though  not  as  regular  as  the  return  of  the  seasons. 
The  main  export  of  Texas  is,  moreover,  cotton,  and  the  chief 
market  for  that  is  England,  another  paper-money  country,  subject 
to  money  revulsions,  not  as  frequent,  but  sometimes  as  violent  as 
our  own.  In  addition  to  this,  it  should  be  taken  into  consideration 
that,  in  all  new  settlements,  some  time  must  elapse  before  the  dif 
ferent  relations  of  supply  and  demand  can  attain  the  regularity 
which  they  have  in  old  communities. 

All  these  difficulties  Texas  has  to  contend  with.  But,  unbol- 
stered  by  bank  credits,  and  governed  by  that  best  of  all  regulators, 


238  THE  FISCAL  HISTOKY  OF  TEXAS. 

gold  and  silver,  her  merchants  limit  their  purchases  of  goods 
abroad  by  the  actual  demands  of  the  planters  at  home,  measuring 
that  demand  by  the  surplus  crops  the  planters  have  to  dispose  of. 
Exchanges  are  regular.  The  maximum  rates  never  exceed  the 
cost  of  transporting  specie,  and  often  fall  below  it.  A  gentleman 
of  Austin  told  us  that  he  had,  in  the  course  of  years,  negotiated 
bills  on  New  York  to  the  amount  of  two  hundred  thousand  dollars, 
and  had  seldom  given  or  received  either  premium  or  discount.  At 
Galveston,  from  what  we  could  learn,  exchanges  on  New  York  have 
not  for  years  been  at  any  time  at  more  than  one  and  a  half  pre 
mium.  Sometimes  exchanges  set  against  the  North  and  in  favor 
of  Texas. 

Prices  are  not  low.  At  Austin,  in  March,  1852,  butter  was 
from  thirty-five  to  forty  cents  a  pound  ;  flour  was  ten  dollars  and 
a  half  a  barrel ;  beef  five  cents  a  pound ;  chickens  twenty-five 
cents  a  piece  ;  eggs  twenty-five  cents  a  dozen.  These  facts  show 
that  hard-money  and  high  prices  are  not  incompatible,  though  it 
is  proper  to  observe  that  the  prices  in  that  particular  neighbor 
hood  at  that  time  were  owing  in  part  to  demands  from  immigrants, 
and  in  part  to  a  detachment  of  United  States  forces  having  been 
quartered  in  the  town.  Throughout  Texas,  however,  prices  are 
quite  as  high  as  they  are  (other  things  considered)  in  the  most 
paper-money  loving  parts  of  the  Union. 

The  rate  of  interest  is  high,  because  the  profits  of  trade  are 
great.  Money  is  scarce,  as  money  ought  to  be,  for  without  scarcity 
it  would  lose  its  value.  But  gold  and  silver  money  is  in  Texas 
quite  as  plentiful,  in  proportion  to  other  circulating  wealth,  as 
paper-money  is  in  New  York  or  Massachusetts. 

How  long  this  state  of  things  will  last,  we  know  not.  The  editor 
of  the  Texas  State  Gazette,  the  government  paper,  states  that  it 
was  want  of  time  only  that  prevented  the  Legislature,  at  its  recent 
session,  from  taking  the  initiatory  steps  to  such  a  change  in  the 
constitution  as  will  make  it  possible  to  establish  paper-money 
banks.  The  editor  himself  is  in  favor  of  the  change.  The  Demo 
cratic  party,  he  observes,  is  not  opposed  to  banks ;  it  is  only  op 
posed  to  a  bank  of  the  United  States.  It  is  an  error,  moreover,  he 
asserts,  to  suppose  that  banks  are  intended  for  the  benefit  of  the 
rich ;  they  are,  in  reality,  intended  for  the  benefit  of  the  poor. 

Arguments  like  these  will  hardly  fail  to  have  their  effect  in  a 


THE  FISCAL  HISTORY  OP  TEXAS.  239 

country  where  many  must  be  desirous  of  an  inflation  of  the  cur 
rency,  even  if  it  should  last  only  long  enough  to  enable  them  to 
get  high  prices  for  the  square  leagues  of  land  for  which  they  can 
not  now  find  purchasers.  The  Legislature  being  already  gained, 
all  the  editor  has  to  do  is  to  unite  with  himself  one-half  of  the 
other  able  editors  in  the  State,  and  the  work  is  accomplished.  It 
may  be  very  true  that  three-fourths  of  the  people  of  Texas  may 
be,  in  their  hearts,  opposed  to  a  renewal  of  the  paper-money  poli 
cy;  but  Americans  are  always  in  haste  to  be  rich,  and  the  Texans 
are  (whatever  some  people  may  think  to  the  contrary)  full-blooded 
Americans.  Many  will  favor  the  projected  change,  not  because 
convinced  that  it  will  benefit  the  community,  but  because  they 
will  hope  thereby  to  benefit  themselves. 

Even  supposing  the  paper-money  men  to  remain  a  minority,  a 
well-organized  minority,  closely  bound  together  by  selfish  interests, 
is  almost  always  too  strong  for  a  majority  that  has  only  the  public 
good  in  view. 

At  first  sight,  indeed,  there  would  seem  to  be  some  difficulty  in 
effecting  the  desired  amendment  to  the  constitution.  First,  it 
must  receive  the  approbation  of  two-thirds  of  each  House ;  second 
ly,  it  must  be  published  in  the  public  prints  for  at  least  three 
months  before  the  next  general  election  of  representatives ;  third 
ly,  it  must  receive  a  majority  of  the  votes  of  all  the  citizens  voting 
for  representatives;  fourthly,  it  must  have  the  sanction  of  two- 
thirds  of  each  House  of  the  next  Legislature;  and  fifthly,  the 
amendment  must  be  read  on  three  several  days  in  each  House. 

These  are  obstacles  indeed.  But  greater  obstacles  than  these 
can  be  overcome,  when  the  object  is  individual  enrichment  through 
legislative  enactment. 


240  THE  FISCAL  HISTORY  OF  TEXAS. 


CHAPTER    XXXIII. 

COMPARISON  OF  THE  ACTION  OF  TEXAS,  THE  OTHER  STATES,  AND  THE 
UNITED  STATES,  IN  RELATION  TO  PUBLIC  DEBTS. 

Laws  of  Texas  concerning  interest  on  private  debts — Their  good  effect — Erroneous 
views  of  the  Texans  concerning  their  public  debts — Arguments  drawn  from  the 
action  of  the  United  States  in  relation  to  continental  currency  shown  to  be  un 
founded — Contrast  of  the  conduct  of  Texas  and  that  of  the  other  States  in  rela 
tion  to  public  debts. 

THE  chief  arguments  adduced  by  the  Texans  in  favor  of  their 
scaling  system  are  the  examples  set  by  other  governments  in 
times  of  difficulty,  and  that  the  value  a  government  receives  in 
time  of  trouble  is  all  that  it  is  honestly  bound  to  pay  in  times  of 
prosperity — in  other  words,  that  no  insurance  is  due  on  public 
debts.  They  do  not  carry  the  doctrine  so  far  as  to  say  that  no 
insurance  is  due  on  private  debts.  From  the  remains  of  that 
superstition  of  the  Middle  Ages,  which  teaches  that  the  receiving 
of  interest  is  a  sin,  they^re  freer  than  the  people  of  most  other 
countries.  They  regard  it  as  almost  as  absurd  for  the  Legislature 
to  attempt  to  regulate  the  rent  (i.  e.  interest)  of  money  as  to  regu 
late  the  rent  of  houses  and  lands  (i.  e.  the  interest  of  money  in 
vested  in  houses  and  lands).  Their  statutes  make  a  distinction 
between  "legal  and  conventional  interest."  "  On  all  written  con 
tracts,  when  no  specific  premium  or  rate  of  interest  is  expressed, 
interest  shall  be  allowed  at  the  rate  of  eight  per  cent,  per  annum." 
But  "  the  parties  to  any  written  contract  may  agree  to  and  stipu 
late  for  any  premium  or  rate  of  interest,  not  exceeding  twelve  per 
cent,  per  annum  on  the  amount  or  value  of  the  contract ;  and  the 
same  may  be  taken,  *  recovered,'  and  allowed." 

Thus,  under  specific, contracts,  the  lender  can,  by  law,  recover 
twelve  per  cent,  interest.  He  is  free  to  take  more,  if  he  can  get 
it.  But  the  law  will  not  aid  him  in  collecting  it.  It  is  then  a 
debt  of  honor  between  the  parties ;  and  due  means  are  taken  that 


THE  FISCAL  HISTORY  OF  TEXAS.  241 

the  creditor  shall  not  convert  this  debt  of  honor  into  a  debt  re 
coverable  by  law.     To  insure  this,  it  is  provided 

"  That  all  contracts  or  instruments  of  writing  whatever,  which  may,  in 
any  way,  directly  or  indirectly,  violate  the  foregoing  provisions  of  this  act, 
by  stipulating  for  allowing  or  receiving  a  greater  premium  or  rate  of  inte 
rest  than  twelve  per  cent,  per  annum,  for  the  loan,  payment,  or  delivery  of 
any  money,  goods,  wares,  merchandise,  bonds,  notes  of  hand,  or  any  com 
modity,  shall  be  void  and  of  no  effect  for  the  whole  premium  or  rate  of 
interest  only ;  but  the  principal  sum  of  money,  or  the  value  of  the  goods, 
wares,  merchandise,  bonds,  notes  of  hand,  or  commodity,  may  be  received 
and  recovered/' 

This  law  has  been  pretty  well  tested,  for  it  was  passed  in  1840, 
and  remains  to  the  present  day  unmodified,  affording  an  example 
of  stability  that  is  quite  remarkable  in  Texan  legislation. 

Perhaps  a  better  law  could  not  be  devised.  The  business  of 
borrowing  and  lending  is  left  free,  as  it  ought  to  be.  But  it  is 
free  all  round.  The  borrower  is  free  to  pay  a  sum  exceeding 
twelve  per  cent.,  if  he  chooses;  and  the  lender  is  free  to  receive 
whatever  the  borrower  is  willing  to  give.  At  the  same  time,  the 
courts  of  justice  are  left  free  not  to  interfere  with  the  parties. 

But  cases  of  extortion  may  occur.  Then  the  debtor  has  his 
remedy;  and  the  would-be  extortioner  is  punished  by  being  de 
prived  of  the  whole  of  the  interest  he  has  bargained  for.  If  the 
law  went  further  than  this — if  it  deprived  the  money-lender  of 
principal  also,  it  would  hold  out  inducements  to  dishonest  bor 
rowers  to  defraud  their  creditors. 

The  money-lender  has  an  interest  in  not  charging  more  than 
twelve  per  cent.,  for  if  he  charges  fifteen,  fourteen,  thirteen,  or 
even  twelve  and  a  half,  he  may  forfeit  the  whole  of  the  interest, 
and  not  recover  the  principal  without  a  lawsuit.  At  the  same 
time,  if  commercial  interest  rises  above  this  rate,  he  has  an  inte 
rest  in  lending,  because  the  borrower  has  an  interest  in  paying. 
If  he  does  not  pay  according  to  agreement,  his  credit  is  (except  in 
attempts  at  extortion)  forever  gone  in  the  money-market  of  Texas. 

Borrowers  and  lenders  ought  to  be  at  liberty  to  make  such  con 
tracts  as  they  choose,  and  it  is  proper  for  the  law  to  enforce  these 
contracts  when  neither  party  takes  undue  advantage  of  the  other. 
But  there  is  no  good  reason  why  all  the  judges,  all  the  jurors,  all 
the  sheriffs,  all  the  constables,  and  all  the  prisons  of  a  country 
should  be  put  in  requisition  to  enforce  extortionate  contracts.  On 
16 


242  THE  FISCAL  HISTORY  OF  TEXAS. 

the  contrary,  those  who  attempt  to  enforce  such  contracts  ought 
to  be  punished ;  and  for  this  the  laws  of  Texas  sufficiently  provide 
in  compelling  the  would-be  extortioner  to  forfeit  the  whole  of  the 
interest  he  may  have  bargained  to  receive. 

The  law  works  well.  Texas  is  a  country  of  unlimited  natural 
resources,  but  of  very  limited  capital.  The  demand  for  capital  is 
consequently  great,  and  the  rent  of  loanable  capital  is  very  high. 
This  is  shown  not  only  in  the  rent  or  interest  demanded  for  money 
loaned,  but  in  the  rent  demanded  for  improved  lands.  In  the  neigh 
borhood  of  Austin,  two  hundred  and  fifty  miles  in  the  interior, 
improved  lands  rent  for  ten  dollars  an  acre  per  annum,  while  lands 
nearly  as  good  and  but  a  few  miles  distant  can  be  bought,  in  fee 
simple,  at  one  or  two  dollars  an  acre.  The  immigrants  from  the  old 
States,  bringing  their  working  hands  with  them,  find  it  more  advan 
tageous  to  pay  this  high  rent  for  lands  on  which  their  labor  will 
be  immediately  productive,  than  to  purchase  provisions  till  they 
can  bring  their  own  lands  into  cultivation.  As  the  number  of  acres 
of  improved  land  offered  for  rent  is  relatively  small,  and  the  num 
ber  of  persons  who  wish  to  rent  is  relatively  great,  the  high  price 
above  stated  is  given  and  received. 

So  in  the  case  of  loanable  capital  in  the  form  of  money.  The 
demand  for  it  is  great.  The  supply  is  limited,  and  the  rate  of 
commercial  interest  is  consequently  high.  At  Galveston,  it  is 
seldom  below  twelve  per  cent.,  and  sometimes  rises  to  twenty.  It 
has  been  known  to  be  sixty,  but  then  only  for  a  few  days.  In  New 
York  and  Boston,  commercial  rates  rise  sometimes  in  the  same 
ratio  above  legal  rates,  for  laws  cannot  give  fixidity  to  that  the 
very  essence  of  which  is  variability. 

In  such  a  country  as  Texas,  any  restrictions  on  the  free  circula 
tion  of  loanable  capital  would  be  very  injurious;  and  so  well  are 
the  laws  of  Texas  adapted  to  the  circumstances  of  the  country,  that 
we  could  hear  of  but  one  case  in  which  a  debtor  refused  to  pay 
interest  on  the  ground  of  having  been  charged  more  than  the  law 
allowed,  and  then  the  jury  brought  in  a  verdict  in  favor  of  the 
lender. 

One  consequence  of  this  freedom  of  borrowing  and  lending  is  an 
increase  in  the  amount  of  capital  loaned.  Many  persons  lend  at 
commercial  rates  who  would  not  lend  at  all,  if  the  laws  (as  in 


THE  FISCAL  HISTORY  OF  TEXAS.  243 

some  of  the  old  States)  made  it  a  crime  to  lend  above  a  specified 
rate. 

In  Texas,  moreover,  loanable  capital  is  not  collected  into  banks, 
and  there  placed  under  the  control  of  irresponsible  boards  of 
directors.  Every  man  lends  his  own  capital  without  the  interven 
tion  of  banks  or  brokers.  No  "  go-between"  is  necessary  to  evade 
unjust  and  oppressive  laws,  for  there  are  no  unjust  and  oppressive 
laws  to  evade. 

One  consequence  is  an  escape  from  much  of  that  litigation  which 
is  so  common  in  the  old  States.  The  money  which  debtors  in 
New  York  and  Pennsylvania  pay  to  their  lawyers,  they  pay  in 
Texas  to  their  creditors.  The  lawyers  in  Texas  have  much  cause 
of  complaint  as  to  this  freedom  of  borrowing  and  lending,  as  it 
deprives  them  of  much  of  their  business.  But  they  are  the  only 
men  who  have  cause  to  complain. 

We  do  not  pretend  to  say  that  credit  in  Texas  is  unattended 
with  evils.  Wherever  there  is  credit,  there  must  be  debt.  Where 
profits  of  trade  are  high,  men  are  naturally  disposed  to  stretch  their 
credit  to  the  utmost  in  order  that  they  may  get  the  capital  of  others 
into  possession.  They  thus  involve  themselves  in  debts,  from  which 
in  some  cases  it  is  difficult,  in  others  impossible,  to  extricate  them 
selves.  This  occurs  in  Texas  as  elsewhere.  In  addition  to  this, 
Texas,  as  part  of  a  paper-money  confederation,  suffers  from  every 
contraction  and  expansion  of  the  banks  of  New  York  and  Phila 
delphia  ;  but  having  no  banks  of  her  own,  or  none  of  much  account, 
and  being  exempted  by  her  location  from  the  operations  of  the 
banks  of  the  other  States,  except  in  a  secondary  degree,  she  suffers 
much  less  than  other  parts  of  the  Union. 

Some  readers  may  regard  this  as  an  episode.  If  it  is,  we  cannot 
help  it.  It  is  connected  with  the  main  chain  of  our  history.  The 
laws  have  much  to  do  in  forming  public  opinion.  The  laws  of 
Texas  cause  a  distinction  to  be  made  in  the  public  mind  between 
legal  and  conventional  rates  of  interest.  The  former  may  be  re 
covered  by  law ;  the  latter  cannot  when  they  exceed  a  certain 
rate,  but  ought  to  be  paid,  except  when  the  amount  is  extortion 
ate. 

The  Texans  regard  their  public  debt  as  falling  within  the  last 
category.  The  full  amount  may  be  due  according  to  the  letter  of 
the  contract,  but  it  is  not  due  in  equity  ;  it  is  not  due  in  honor, 


244  THE  FISCAL  HISTORY  OF  TEXAS. 

for  the  government  never  received  (as  they  maintain)  adequate 
consideration  for  it. 

We  differ  from  them  in  judgment.  If  a  private  individual  wishes 
to  borrow,  there  are  relatively  few  to  whom  he  can  make  known 
his  wants.  The  whole  world  knew  of  the  necessities  of  Texas,  and 
by  issuing  her  securities  in  as  small  amounts  as  five,  three,  two, 
and  even  one  dollar,  she  took  every  means  in  her  power  to  enlist 
every  man,  woman,  and  child  who  had  a  dollar  to  lend  among  her 
creditors.  She  sent  agents  to  the  United  States,  agents  to  England, 
and  agents  to  France,  and  all  for  no  other  purpose  in  the  world 
than  to  get  people's  dollars  from  them.  In  order  to  induce  folks  to 
part  with  their  money,  she  pledged  everything  she  had  in  the  world 
— her  lands,  her  customs,  her  direct  taxes,  her  license-taxes,  and 
above  all  her  "public  faith,"  which  is  her  public  honor.  To  suit 
the  various  tastes  and  fancies  of  men  and  women,  who  had  money 
to  lend,  she  issued  her  securities  in  every  variety  of  form,  treasury 
notes  and  exchequer  bills,  printed  notes  and  engraved  notes,  notes 
with  interest  and  notes  without,  "  red  backs,"  and  star  notes,  and 
change  notes,  eight  per  cent,  treasury  bonds  and  eight  per  cent, 
funded,  and  ten  per  cent,  consolidated  debts. 

Texas  borrowed  in  the  open  market  of  the  world,  and  if  she  got 
but  little  for  some  of  her  securities,  it  was  because  they  were  worth 
but  little.  That  they  brought  even  the  little  they  did  was  because 
Texas  promised  much.  If  her  meaning  was,  "  Though  I  promise  to 
pay  one  hundred  cents,  I  intend  to  pay  only  fifty  cents,  or  twenty 
cents,  as  suits  my  convenience,"  she  ought  to  have  said  so.  Then 
she  could  not  have  borrowed  at  all. 

If  hard  pushed  by  arguments  of  this  kind,  the  friends  of  the 
scaling  system  in  Texas  attempt  to  defend  themselves  by  saying 
that  the  United  States  scaled  their  debts  in  the  case  of  the  con 
tinental  issues.  Those  who  are  in  want  of  precedents  for  injus 
tice  will  never  be  at  a  loss  to  find  them.  It  would  have  been  better 
if  the  Texans  had  so  used  the  experience  of  the  United  States  in 
the  case  of  continental  money  as  to  avoid  striking  on  the  same 
rock.  Speaking  of  this  same  continental  money,  an  eye-witness 
of  its  effects  says: — 

"  We  have  suffered  more  from  this  cause  than  from  every  other  cause  of 
calamity.  It  has  killed  more  men,  pervaded  and  corrupted  the  choicest 
interests  of  our  country  more,  and  done  more  injustice  than  even  the  arms 
and  artifices  of  our  enemies.  *  *  *  * 


THE  FISCAL  HISTORY  OF  TEXAS.  245 

"  It  has  polluted  the  equity  of  our  laws,  turned  them  into  engines  of 
oppression  and  wrong  ]  corrupted  the  justice  of  our  public  administration; 
destroyed  the  fortunes  of  thousands  of  those  who  had  most  confidence  in 
it ;  enervated  the  trade,  husbandry,  and  manufactures  of  our  country,  and 
gone  far  to  destroy  the  morality  of  our  people."* 

The  Revolutionary  Congress  did  scale  this  continental  money ; 
and  by  the  very  act  of  scaling  greatly  aggravated  the  evils  above 
described.  Deeply  did  it  deplore  the  necessity  for  the  act. 
Speaking  of  it  in  after  years,  Mr.  Gerry  said : — 

"  Congress  were  reduced  to  the  necessity  of  scaling  the  old  debt,  to  sink 
it,  and  of  beginning  anew,  or  of  giving  up  the  cause.  Sad  alternative !  to 
violate  the  public  faith,  or  be  enslaved." 

The  first  Congress,  under  the  present  Constitution  of  the  United 
States,  took  measures  for  funding  the  revolutionary  debt.  The 
foreign  debt  was  paid  at  par,  the  domestic  certificate  debt  was 
funded  at  par,  and  the  continental  bills  were  funded  at  one  hundred 
for  one.  While  they  were  yet  a  common  circulating  medium  (ten 
years  before),  they  had  depreciated  to  a  thousand  for  one. 
"  Their  circulation  was  never  more  brisk  than  when  they  were  five 
hundred  for  one."  As  they  were  in  everybody's  hands  when  they 
became  worthless,  it  was  argued  that  the  sinking  of  them  in  this  way 
by  depreciation  was  equivalent  to  sinking  them  by  general  taxa 
tion  ;  and  that  to  impose  a  general  tax  for  the  sake  of  redeeming 
them  in  the  hands  of  those  with  whom  they  chanced  to  be  found 
ten  years  afterwards,  was  very  like  taxing  the  community  a  second 
time  for  the  sake  of  that  for  which  it  had  been  very  heavily  taxed 
already. 

Whatever  may  be  thought  of  this  argument,  a  better  may  be 
found  in  the  fact  that  it  was  utterly  impossible  to  redeem  the  con 
tinental  bills  at  par,  or  pay  the  interest  on  them  if  funded.  The 
issues  amounted  to  $357,000,000,  without  including  the  counter 
feits  thrown  into  circulation  by  the  British.  Even  supposing  it 
possible  to  distinguish  the  clumsily  executed  originals  from  the 
counterfeits,  the  attempt  to  pay  the  interest  on  them  would  have 
crushed  the  government. 

The  United  States  assumed  all  the  rest  of  the  revolutionary 

*  See  Essays  by  Pelatiah  Webster,  a  merchant  of  Philadelphia,  published  at  dif 
ferent  intervals  from  1776  to  1780,  in  pamphlet  form,  and  collected  into  a  volume  in 
1790. 


246  THE  FISCAL  HISTORY  OF  TEXAS. 

debt  at  par,  and  thereby  assumed  as  much  as  they  could  bear. 
Even  to  enable  them  to  bear  so  much  as  they  assumed,  it  was 
found  necessary  to  defer  for  ten  years  the  payment  of  interest  on 
one-third  of  the  debt. 

The  cases  of  the  United  States  and  Texas  are  so  different  that 
the  action  of  the  first  in  funding  the  continental  bills  at  one 
hundred  for  one,  cannot  be  adduced  as  an  excuse,  much  less  as  a 
justification  of  the  latter  for  the  course  she  is  pursuing. 

The  continental  bills  were  sunk  by  a  depreciation  equivalent  to 
a  tax  to  that  amount  on  the  people  who  were  benefited  by  the 
Revolution.  Not  one  of  them  was  exported.  This  cannot  be  said 
of  the  promissory  notes  of  Texas.  And  if  Texas  insists  on  scaling 
them,  she  will  throw  great  part  of  the  costs  of  her  revolution  on 
people  deriving  no  benefit  from  it.  This  is  a  point  of  great  im 
portance.  Some  of  the  Texans  seem  to  think  that  the  notes  being 
held  by  non-residents  is  reason  enough  in  itself  why  they  should 
be  scaled  down  to  the  lowest  rate  possible.  To  us  it  is  an  addi 
tional  reason  why  they  should  be  paid  in  full.  If  the  notes  were 
held  by  residents  of  Texas,  it  might  be  supposed  that  they  re 
ceived  some  compensation  in  the  increased  value  of  their  lands 
and  the  general  prosperity  consequent  on  the  successful  issue  of 
the  struggle.  But  no  such  compensation  can  be  afforded  to  non 
residents.  They  suffer  all  the  injustice,  without  any  abatement. 

The  other  point  of  distinction  is  that  the  United  States  had  not 
the  power  to  redeem  their  continental  bills,  while  Texas  has  full 
ability  to  pay  her  promissory  notes. 

None  but  those  who  have  turned  their  attention  specially  to  the 
subject  know  the  state  of  poverty  and  destitution  in  which  the  old 
thirteen  States  were  left  by  the  revolutionary  war — a  state  from 
which  they  hardly  began  to  emerge  till  the  present  Constitution 
was  brought  into  operation,  and  till  the  wars  of  the  French  Revo 
lution  created  a  new  demand  for  our  products,  and  gave  employ 
ment  to  our  shipping.  In  the  very  debate  which  was  had  on  the 
funding  of  the  public  debt  (1791),  Mr.  Boudinot  said  there  was  one 
township  in  New  Jersey  in  which  three  hundred  executions  were 
out  for  non-payment  of  taxes.  And  the  Secretary  of  the  Treasury, 
in  his  report,  "with  his  plan  for  supporting  public  credit,"  made 
the  following  statement  in  regard  to  the  value  of  land  : — 

"  The  present  depreciated  state  of  that  species  of  property  is  a  serious 


THE  FISCAL  HISTORY  OF  TEXAS.  247 

calamity.  The  value  of  cultivated  lands,  in  most  of  the  States,  has  fallen, 
since  the  Revolution,  from  twenty-five  to  thirty  per  cent.  In  those  further 
south,  the  decrease  is  still  more  considerable.  Indeed,  if  the  representa 
tions  continually  received  from  that  quarter  may  be  credited,  lands  there 
will  command  no  price  which  may  not  be  deemed  an  almost  total  sacrifice." 

How  different  the  condition  of  Texas,  with  her  lands  rising  in 
value,  and  prosperity  in  all  her  quarters ! 

If  any  foreign  government  had  bestowed  on  the  United  States, 
either  in  payment  for  wild  lands  or  for  any  other  cause,  a  sum  of 
money  equal  to  their  debts,  they  would  have  redeemed  every  dollar 
of  the  continental  bills.  But  the  United  States  have  bestowed  on 
Texas,  in  payment  for  wild  lands,  a  sum  exceeding  the  whole 
amount  of  her  circulating  debt,  and  yet  Texas  will  not  pay. 

As  little  of  excuse  or  justification  can  Texas  derive  from  the 
recent  conduct  of  some  of  the  States  of  our  Union.  Mississippi 
has  repudiated  the  Union  Bank  bonds,  because,  as  she  avers,  they 
were  issued  and  negotiated  in  violation  of  law  and  of  constitution. 
Texas  cannot  make  this  excuse.  All  her  debts  were  incurred  in 
strict  conformity  with  both  law  and  constitution. 

Florida  pleads  minority :  that  she  was  a  mere  territory,  and 
that  the  United  States,  as  her  guardian,  ought  to  have  prevented 
her  running  into  debt.  Texas  cannot  set  up  this  plea,  for  she  was 
an  independent  Republic,  in  the  plenary  enjoyment  of  all  the  at 
tributes  of  sovereignty. 

The  only  two  of  the  remaining  States  that  have  repudiated  any 
portion  of  their  debts  are  Indiana  and  Michigan,  and  they  have 
done  it  on  the  ground  that  gross  frauds  were  practised  in  their 
negotiation.  Texas  cannot  make  this  apology.  All  her  debts 
were  fairly  and  openly  contracted. 

Arkansas  does  not  pay ;  but  she  has  not  repudiated.  She  ac 
knowledges  the  amount  due,  and  once  every  two  years,  through 
her  Governor,  expresses  her  deep  regret  that  she  cannot  discharge 
her  obligations.  Texas  can  pay,  and  will  not. 

Illinois,  Indiana,  and  Michigan,  finding  it  impossible  to  pay  in 
money  certain  of  their  admitted  debts,  freely  surrendered  to  their 
creditors  the  railroads  and  other  improvements  on  which  the 
borrowed  money  had  been  expended.  To  this  they  added  lands. 
They  did  the  best  their  circumstances  would  permit.  If  Texas 
would  do  likewise,  her  creditors  would  have  no  cause  of  complaint. 

Pennsylvania,  Maryland,  and  perhaps  some  of  the  other  States, 


248  THE  FISCAL  HISTORY  OF  TEXAS. 

suspended  for  a  time  the  payment  of  interest,  or  paid  only  in  in 
convertible  paper.  But  this  was  matter  of  stern  necessity,  caused 
by  the  suspension  of  specie  payments  on  the  part  of  the  banks, 
with  the  derangement  of  commerce  and  the  prostration  of  industry 
thereon  consequent.  But,  as  soon  as  the  banks  resumed  specie 
payments,  and  as  soon  as  Pennsylvania  and  Maryland  could  bring 
into  successful  operation  the  new  revenue  systems  which  the 
change  of  times  made  necessary,  they  resumed  the  payment  of 
interest  in  lull. 

Texas  stands  alone.  She  repudiates  on  principles  on  which  the 
other  States  have  never  acted.  They  all,  except  her,  admit,  in 
the  language  of  Mr.  Sedgwick,  that,  "  whenever  a  voluntary 
engagement  is  made  for  a  valuable  consideration  for  property  ad 
vanced,  or  services  rendered,  and  the  terms  of  the  contract  are 
understood,  if  no  fraud  or  imposition  is  practised,  the  party  en 
gaging  is  bound  to  the  performance,  according  to  the  literal  mean 
ing  of  the  words  in  which  it  is  expressed."  None  of  the  States 
except  Texas  attempts  to  set  aside  such  contracts  on  the  plea 
that  they  have  not  received  as  much  as  they  have  promised  to 
give.  None  of  the  States  but  Texas  maintains  that  insurance  is 
not  due  on  money  borrowed  in  times  of  adversity.  None  of  the 
States  but  Texas  thinks  of  reopening  accounts  ten  years  after  they 
have  been  fairly  audited,  and  ten  years  after  the  negotiable  certi 
ficates  of  the  same  have  been  in  circulation.  None  of  the  States 
but  Texas  gives  a  preference  to  domestic  over  foreign  creditors. 
None  of  the  States  but  Texas  attempts  to  draw  a  line  of  distinction 
between  original  holders  and  assignees  of  evidences  of  public  debt. 
None  of  the  States  but  Texas  has,  or  might  have,  ten  millions 
in  her  treasury,  and  fifty  million  dollars'  worth  of  public  lands. 
The  public  lands  in  the  other  States  are,  for  the  most  part,  the 
property  of  the  Federal  Government.  In  this  respect,  Texas  has 
great  advantages  over  the  other  States.  Yet  she  will  not  pay 
what  she  owes. 


THE  FISCAL  HISTORY  OF  TEXAS.  249 


CHAPTER    XXXIV. 

PRESENT  CONDITION  OF  TEXAS. 

Improved  condition  of  Texas  as  set  forth  in  the  inaugural  address  of  Governor  Bell 
and  Lieutenant-Governor  Henderson — Contrast  with  its  condition  a  few  years 
previous  as  set  forth  by  President  Houston — This  the  result  of  annexation,  and 
this  "  a  sufficient  consideration"  for  all  the  debts  Texas  has  incurred — Complaints 
against  Texas — Unreasonable  demands  of  her  public  men — Land-speculations  in 
Texas — Their  eifects  on  the  public  mind — Popular  arguments  of  the  Texans  in 
favor  of  scaling — Led  to  scaling  in  part  by  the  necessity  of  making  equation  of 
currencies — Audited  claims  not  to  be  reopened — Popular  arguments  in  favor  of 
scaling  briefly  examined — Less  made  by  investments  in  Texan  securities  than  by 
other  investments — Prices  of  leading  stocks  in  New  York  market  in  1842,  1845, 
and  1852 — Prices  of  bank  and  other  stocks  in  Philadelphia  in  1842,  1845,  and 
1852 — Bad  effects  on  American  reputation  in  Europe  if  Texas  does  not  review  her 
course — Indications  of  a  change  for  the  better  in  public  sentiment  in  Texas — The 
interest  of  Texas  will  be  promoted  by  her  complying  with  her  contracts. 

SINCE  annexation  to  the  Union,  the  fiscal  concerns  of  Texas  have 
undergone  a  striking  improvement.  Her  revenues  have  exceeded 
her  expenses,  and  the  interest  on  the  bonds  received  from  the 
United  States  has  enabled  her  to  release  the  State  tax  collected 
in  each  county  for  the  benefit  of  such  county.* 

General  prosperity  prevails  ;  but  on  this  point  it  will  be  best  to 
let  the  Texans  themselves  speak. 

In  the  address  which  Governor  Bell  made  to  the  Legislature, 
December  22,  1851,  at  the  commencement  of  his  second  term  of 
office,  he  uses  the  following  language  : — 

"  I  cannot  conclude  this  address  without  expressing  to  you  who  are  now 
present,  and  to  my  fellow-citizens  generally,  my  heartfelt  congratulations 
upon  the  prosperous  condition  of  our  young  State.  To  me,  the  contrast 
between  what  Texas  is,  and  what  she  was  in  1836,  is  indeed  most  striking: 
it  is  difficult  to  realize  the  great  and  happy  change  that  has  taken  place. 
*  A  dark  cloud  then  hung  lowering  over  this  fair  land. 
The  '  Lone  Star'  shot  fitful  through  the  gloom — now  beaming  with  the 
light  of  peace  and  hope — now  almost  quenched  in  blood,  yet  ever  with  a 

*  See  Appendix  N  for  revenue  of  State  of  Texas ;  Appendix  0  for  assessment  of 
taxes  ;  Appendix  P  for  agricultural  statistics. 


250  THE  FISCAL  HISTORY  OF  TEXAS. 

halo  of  glory  encircling  it.  We  have  lived  to  see  that  lost  pleiad  restored 
to  its  proper  place  among  its  sisters,  no  longer  obscured  by  doubt  or  dif 
ficulty,  but  shining  far  abroad  to  the  nations  of  the  earth  a  beacon,  which 
every  day  grows  brighter  and  more  glorious." 

This  is  magniloquent ;  but  magniloquence  is  excusable  in  the 
Governor  of  a  State,  which,  even  in  its  reduced  limits,  is  larger 
than  the  whole  empire  of  Austria. 

Similar  is  the  language  which  James  W.  Henderson,  the  newly- 
elected  Lieutenant-Governor,  used  on  the  same  occasion : — 

"I  may  be  permitted  to  offer  to  the  Senators  and  Representatives  of  Texas, 
and  to  my  fellow-citizens,  my  sincere  congratulations  upon  the  happy  and 
prosperous  condition  of  all  the  States  of  this  now  glorious  Union. 

******** 

"Whilst  these  prospects  are  gratifying  to  us  as  citizens  of  the  great  Re 
public,  we  have,  as  citizens  of  Texas,  equal  cause  to  rejoice  in  the  vast  im 
provements  which  are  everywhere  presented  throughout  the  broad  limits  of 
our  own  State.  When  we  contrast  our  present  condition,  social,  moral, 
and  political,  with  that  of  a  few  years  past,  we  are  astonished  at  our  rapid 
advancement;  and  look  back  with  the  deepest  interest  to  the  time  when 
Texas,  without  organization  and  without  means,  yet  impelled  by  a  strong 
sense  of  the  value  and  blessings  of  liberty,  dissolved  her  political  connection 
with  Mexico,  and  established  an  independent  republican  government,  under 
the  most  trying  and  discouraging  circumstances  that  ever  befel  an  oppressed 
and  resisting  people. 

"Yes!  at  a  time  when  Texas,  without  a  dollar  in  her  military  chest,  not 
a  bayonet  bristling  in  her  ranks;  with  the  hopes  of  her  people  depressed  by 
the  atrocities  committed  upon  her  citizens  and  soldiers :  when  the  homes  of 
her  citizens  were  in  flames,  when  her  soldiers  lay  butchered  upon  the  ill- 
fated  plains  of  Goliad,  and  around  the  desolated  walls  of  the  Alamo — nay, 
at  a  time  when  the  progress  of  desolation  and  hostility  marked  the  track 
of  the  invader  as  visibly  as  if  the  besom  of  destruction  had  swept  over  the 
land — the  hearts  of  the  people  failed  not;  and  they  met  in  convention  to 
deliberate  upon  the  affairs  of  Texas. 

******** 

"Since  that  day  [the  day  of  the  battle  of  San  Jacinto]  the  prosperity  of 
Texas  has  been  steadily  advancing:  her  march  has  been  onward,  until  we 
now  behold  her  happy  and  prosperous,  and  rejoicing  in  the  beautiful  bless 
ings  of  a  kind  and  beneficent  Providence/' 

Some  of  the  politicians  of  Texas  maintain  that  she  ought  not 
to  pay  her  debts,  because,  as  they  say,  "  she  received  no  considera 
tion  for  them."  We  assert  that  she  has  received  ample  considera 
tion  for  them  in  all  the  blessings  attendant  on  liberty  and  inde 
pendence  so  eloquently  set  forth  in  the  discourses  of  Gov.  Bell  and 
Lieut. -Gov.  Henderson.  All  the  courage  and  all  the  wisdom  of 
the  men  of  Texas  would  have  availed  them  nothing  without  the 


THE  FISCAL  HISTORY  OF  TEXAS.  251 

auxiliary  aid  of  money.  Without  the  supplies  obtained  from  the 
United  States,  and  for  which  her  present  certificate  debts  were 
exchanged,  the  struggle  with  Mexico  could  never  have  been 
brought  to  a  successful  issue. 

One  way  of  testing  the  value  of  what  we  part  with  is  by  con 
sidering  the  value  we  thereby  acquire.  To  do  this  fairly  in  the 
present  instance,  let  us  suppose  that  all  the  land  and  all  the  other 
wealth  of  Texas  had  been  the  property  of  one  man.  Would  not 
that  man  consider  himself  fortunate  if,  by  an  expenditure  of  ten  or 
twelve  millions,  he  could  bring  his  property  from  under  an  anar 
chical  and  unenlightened  despotism  into  the  control  of  a  free, 
stable,  and  enlightened  government.  Lands  which,  when  Texas 
was  part  of  Mexico,  were  worth  but  from  one  cent  to  fifty  cents  an 
acre,  are,  now  that  Texas  is  part  of  the  United  States,  worth  from 
one  dollar  to  fifty  dollars  an  acre.  The  case  is  not  weakened  by 
the  fact  that  the  advantages  of  this  rise  in  value  are  shared  by 
many  men,  instead  of  being  monopolized  by  one. 

Verily,  Texas  got  her  independence  cheap.  There  are  few 
people  suffering  under  the  yoke  of  oppression  who  would  not  be 
willing  to  pay  many  times  as  much  to  obtain  their  liberty.  Even 
if  the  Texans  should  esteem  religious  and  political  freedom  as  not 
worthy  to  be  taken  into  the  account,  they  have  gained  more  in 
their  increase  of  wealth  than  they  have  promised  to  pay  to  those 
who  aided  them  in  their  struggles. 

The  present  condition  of  Texas  will  appear  the  more  remarkable 
if  we  contrast  it  with  her  condition  a  short  time  before  she  was  an 
nexed  to  the  Union,  as  depicted  by  President  Houston  in  his  mes 
sage  to  the  seventh  Congress,  December  1,  1842 : — 

"  The  nation  has  been  gradually  declining.  Instead  of  deriving  facilities 
and  advantages  from  the  march  of  time,  its  decline  since  the  year  1838  to 
the  present  period  of  depression  has  been  more  rapid  than  perhaps  that  of 
any  other  country  on  the  globe  possessing  the  same  natural  advantages.'' 

The  rapid  improvement  that  has  since  taken  place  has  been 
chiefly  owing  to  annexation.  This  is  admitted  by  Governor  Bell, 
in  the  message  from  which  we  have  already  made  quotations. 

"It  was  not  until  Texas  took  her  place  as  one  of  the  States  of  the  great 
American  Union  that  she  occupied  the  position  which  nature  designed  for 
her.  From  that  period  to  the  present,  her  onward  march  to  power  and  im 
provement  has  been  unexampled.  Nations  behold  the  position  of  our  hopes. 
From  every  land  immigrants  are  flocking  in  welcome  crowds  to  partake  of 


252  THE  FISCAL  HISTORY  OF  TEXAS. 

our  prosperity.  From  the  vine-clad  hills  of  France  and  Germany,  from 
Ireland's  green  shores,  and  England's  smiling  fields,  and  from  our  own 
sister  States,  they  swell  the  flowing  tide,  until  the  solitary  plains  have  been 
made  to  rejoice,  and  the  wilderness  to  blossom  as  the  rose.  A  land  more 
fair  and  happy  never  sun  viewed  in  its  wide  career ;  salubrious,  mild,  its 
hills  are  green,  its  woods  and  prospects  are  fair,  prairies  fertile,  and,  to 
crown  the  whole,  it  is  our  home — the  land  of  liberty  and  all  its  sweets." 

All  this  is  true  ;  but  all  who  have  had  any  transactions,  in  the 
way  of  dollars  and  cents,  with  the  government  of  this  fair  land, 
have  abundant  cause  of  complaint,  and  the  United  States  among 
the  rest.  The  war  with  Mexico,  which  was  brought  on  by  the  an 
nexation  of  Texas,  cost,  as  has  been  computed,  $300,000,000. 
This  expense  was  borne  by  the  United  States.  Texas  was  enriched 
by  the  expenditures  it  caused  within  her  borders  ;  so  much  so  that 
it  is  said  a  part  of  her  population  would  be  very  glad  if  hostilities 
should  be  renewed.  Part  of  the  gross  cost  of  the  war  must  be 
charged  to  the  account  of  California,  Utah,  and  New  Mexico. 
But,  independently  of  this,  the  United  States  have  expended  in 
Texas,  and  for  her  benefit,  more  millions  than  her  debts  amount 
to.  Nearly  half  the  army  of  the  United  States  is  employed  in 
Texas.  Yet  Texas,  with  all  these  liberal  outlays  in  her  borders, 
is  not  content  unless  she  can  wrest  from  the  United  States  five 
millions  in  bonds,  to  which  she  has  no  claim  till  the  conditions  to 
which  she  assented  in  her  act  of  November  25,  1850,  are  fully 
complied  with. 

The  truth  is  that  some  of  the  politicians  of  Texas  seem  to  think 
that  the  United  States  have  been  annexed  to  Texas,  and  not 
Texas  to  the  United  States.  If  any  demand  they  make,  no  matter 
how  unreasonable  it  may  be,  is  not  at  once  granted,  they  are  loud 
in  their  outcries  about  the  grievance  to  which  their  State  is  sub 
jected.  In  view  of  this  state  of  feeling  that  prevails  among  them, 
it  is  a  pity  that  a  direct  vote  was  avoided  in  Congress  on  their 
unjust  pretensions  to  one-half  of  New  Mexico.  We  have  already 
said  that  it  was  judicious  to  avoid  that  vote,  seeing  the  condition 
into  which  public  affairs  had  been  brought  by  the  insane  doings  of 
politicians  of  different  parties.  Yet  an  evil  has  attended  what 
Texas  has  interpreted  as  an  implied  acquiescence  in  her  claims. 
Grant  one  unreasonable  demand  to  an  unreasonable  man  or  an 
unreasonable  State,  and  you  pave  the  way  for  other  demands 


THE  FISCAL  HISTORY  OF  TEXAS. 

equally  unreasonable.     Let  Texas  have  the  reserved  bonds,  an< 
there  is  no  knowing  what  new  claim  she  will  set  up. 

If  her  politicians  are  frustrated  in  their  present  design,  they 
will,  it  may  be,  commence  a  new  agitation,  and  perhaps  appeal  to 
sectional  feelings  to  give  it  additional  force.  They  have,  no  doubt, 
still  in  them  much  of  the  remains  of  the  "  old  Adam,"  which  led 
to  such  violent  party  conflicts  in  the  days  of  the  Republic  ;  exem 
plifications  of  which  are  to  be  found  in  the  bitter  controversies  of 
Gov.  Smith  and  his  council,  in  the  land-speculator's  rebellion,  and 
in  the  war  about  the  land-office  archives.  The  wrath  which 
they  formerly  poured,  in  all  its  concentrated  energy,  on  the  heads 
of  one  another,  they  may  now  pour  out  on  the  people  of  other 
States.  But  if  they  do,  its  venom  will  be  weakened  by  its  diffusion. 

Whatever  their  policy  may  be,  their  demand  for  the  reserved 
bonds  should  be  resisted — calmly  resisted,  but  firmly  resisted — till 
the  conditions  set  forth  in  the  act  of  Congress  of  September,  1850, 
and  assented  to  by  the  Legislature  of  Texas  in  its  act  of  Novem 
ber  25,  1850,  are  fully  complied  with. 

That  there  is  this  strong  disposition  to  get  hold  of  the  bonds, 
and  at  the  same  time' pay  the  public  creditors  but  half  their  dues, 
is  owing  to  a  wish  to  apply  the  money  to  internal  improvements. 
"It  was  great  folly  in  Texas,"  said  one  of  her  Senators,  "to  pay 
her  debts  at  all."  "What,"  said  a  gentleman  from  Louisiana, 
"folly  to  pay  them  at  all?"  The  Louisianian  being  a  creditor 
of  the  State,  felt  some  alarm.  "Yes,"  replied  the  Senator,  "it 
was  folly  to  pay  them  at  all.  Texas  ought  to  have  taken  the  money 
she  got  from  the  United  States,  have  invested  the  same  in  rail 
roads,  and  then  given  the  public  creditors  shares  in  those  rail 
roads." 

We  have  mentioned  elsewhere  that  land-speculations  afford  the 
key  to  all  movements  in  Texas.  They  had,  if  some  authorities 
are  to  be  believed,  much  to  do  in  bringing  on  the  revolution  ;  they 
caused  the  wars  with  the  Cherokee  Indians;  and  they  are  now  the 
chief  obstacle  to  the  creditors  of  the  State  being  paid  their  just 
demands.  The  money  is  wanted  to  make  railroads,  in  order  to 
promote  sales  of  land  in  larger  quantities,  and  for  higher  prices 
than  would  otherwise  be  possible. 

Certainly  no  other  country  affords  such  beautiful  opportunities 
as  Texas  for  land-speculations,  and  her  inhabitants  have  taken  full 


254  THE  FISCAL  HISTORY  OF  TEXAS. 

advantage  of  them.  From  the  best  accounts  that  can  be  collected, 
the  whole  number  of  acres  in  cultivation  in  1848  was  only  512,641, 
while  the  number  of  acres  assessed  and  subject  to  taxation  was 
38,788,439.*  According  to  a  more  recent  statement,  the  whole 
amount  of  land  owned  by  individuals  is  63,783,054. f  In  a  com 
munity  in  which  each  land-owner  has  one  hundred  times  as  much 
land  as  he  has  either  ability  or  disposition  to  cultivate,  there  must 
naturally  be  a  strong  wish  to  dispose  of  the  surplus  to  advantage. 
The  necessary  result  is  that  the  land-speculation  interest  is  pre 
dominant.  Compared  with  it,  the  creditor  interest  is  feeble  in 
deed,  as  nine-tenths  of  the  public  creditors  reside  in  other  States. 
We  met  with  many  persons  in  the  State  who  were  dissatisfied  with 
the  scaling  system;  but,  as  they  are  without  organization,  they 
are  without  influence.  Some  of  the  newspaper  editors  are  of  this 
number;  but  arguments  in  favor  of  paying  the  debts  of  the  Repub 
lic  are  hardly  agreeable  to  the  majority  of  their  readers,  and  a 
stump  orator  who  should  take  the  field  in  behalf  of  the  public 
creditors  would  find  little  sympathy  in  his  hearers. 

"Rapacious  bond-holders,"  and  "greedy  speculators,"  are 
among  the  mildest  of  the  epithets  bestowed  on  such  of  the  credit 
ors  as  seek  payment  according  to  the  letter  of  the  contract.  Land- 
speculations  are,  in  Texas,  quite  in  accordance  with  the  orthodox 
faith.  It  is  only  stock-speculations  that  are  criminal. 

When  men  have  a  deep  interest  in  any  scheme,  it  is  not  very 
difficult  for  them  to  persuade  themselves  of  its  entire  justice. 
And  hence  it  ought  to  occasion  no  surprise  that  the  project  to 
take  the  money  belonging  to  the  public  creditors,  and  apply  it  to 
the  promotion  of  land-speculations,  has  considerable  popularity  in 
Texas.  We  have  already  treated  at  some  length  of  the  arguments 
by  which  this  project  is  supported;  but  more  on  this  head  is  neces 
sary.  So  many  phases  as  error  assumes,  so  many  is  it  necessary 
to  expose. 

One  reason  why  the  arguments  in  favor  of  scaling  have  had  so 
much  effect  on  the  Texan  mind  is  that  scaling,  in  a  certain  sense, 
and  to  a  certain  extent,  in  non-audited  debts,  was  just  and  proper. 
This  was  the  case  in  regard  to  a  part  of  the  second  and  third  class 
debts.  If  any  man  made  out  his  bill  for  services  or  supplies  at 

*  See  Appendix  P.  I  See  Appendix  K. 


THE  FISCAL  HISTORY  OF  TEXAS.  255 

treasury  note  prices,  it  was  just  and  proper  for  the  auditor  and 
comptroller  to  reduce  them  to  their  equivalents  in  specie.  This 
scaling,  if  it  may  so  be  called,  was  a  mere  equation  of  currencies; 
and  as  payment  was  to  be  made  in  the  better  currency,  no  one 
could  object  to  it.  This  kind  of  scaling  was  righteously  applied 
to  the  non-audited,  or  second  and  third  class  debts,  and  it  is  well 
worthy  of  remark  how  little  it  reduced  the  original  amount.  The 
ostensible  sum  of  the  second  class  debt  was  $968,763  28,  reduced 
by  scaling  to  $896,217  80,  being  a  deduction  of  only  7f  cents  in 
the  dollar.  The  ostensible  amount  of  the  third  class  debts  was 
reported  by  the  auditor  as  $97,675  10,  and  the  par  value  as  the 
same.  From  this  it  appears  that  nearly  all  those  whose  accounts 
were  unaudited  when  the  scaling  act  was  passed,  had  made  out 
their  accounts  in  specie;  and  it  was  right  that  the  few  who  had 
made  out  their  accounts  in  treasury  note  prices  should  have  the 
amounts  reduced  to  their  equivalents  in  specie. 

Thus  far,  then,  the  scaling  was  unobjectionable.  But  the  audi 
tor  and  comptroller  had  no  right — the  Legislature  had  no  right — to 
direct  them  to  go  further.  After  an  account  has  once  been  regu 
larly  audited,  and  a  certificate  thereof  duly  issued,  it  is  too  late  to 
change  it.  A  treasury  note,  or  certificate  of  stock,  or  any  other 
negotiable  public  security,  is  like  a  bank-note.  It  is  evidence  that 
the  amount  expressed  on  its  face  is  due  to  the  holder,  and  so 
acknowledged  by  the  government.  If  the  government,  in  audit 
ing  any  claim,  neglected  to  make  a  proper  equation  of  currencies, 
the  fault  was  the  government's,  and  it  ought  to  suffer  the  loss,  if 
any.  The  loss  ought  not  to  be  thrown  on  innocent  third  parties, 
who  have  no  means  of  knowing  what  a  government  owes,  except 
the  government's  own  acknowledgments  of  what  is  due.  Hence 
the  whole  of  the  first  class  debts,  "  consisting,"  in  the  language 
of  the  auditor  and  comptroller,  "  of  audited  and  ascertained 
claims,"  ought  to  have  been  left  untouched.  After  the  evidences 
of  them  had  been  in  circulation,  none  of  them  for  less  than  eight 
years,  and  some  of  them  for  twelve  years,  they  ought  not  to  have 
been  subject  to  a  re-audit. 

To  admit  any  other  principle  than  this  would  be  to  overthrow 
the  very  foundation  of  all  negotiable  securities.  The  amount  ex 
pressed  in  the  treasury  notes  and  certificates  of  stock  is  what 


256  THE  FISCAL  HISTORY  OF  TEXAS. 

Texas  owes,  and  this  amount  she  must  pay,  unless  she  means  to 
violate  her  contracts. 

Suppose  the  Republic  of  Texas,  instead  of  constituting  herself 
a  bank  of  issue,  had,  after  the  manner  of  South  Carolina,  esta 
blished  a  public  bank,  to  issue  notes  and  aid  in  fiscal  operations. 
If  Texas  had  done  this,  she  would  have  done  what  she  had  a  per 
fect  right  to  do  ;  for,  as  she  was  then  without  the  Union,  she  was 
not  bound  by  the  provisions  of  the  United  States  Constitution. 

Suppose,  then,  that  this  Bank  of  Texas,  founded  exclusively  on 
the  credit  and  resources  of  the  Republic,  and  carrying  on  opera 
tions  for  its  exclusive  benefit,  had  done  just  what  the  Republic  did, 
that  is,  issued  notes  in  such  excess  that  they  depreciated  to  fifty, 
forty,  thirty,  twenty,  ten,  and  even  fewer  cents  in  the  dollar. 
Suppose,  finally,  the  Bank  of  Texas  should,  by  some  turn  of  for 
tune,  become  suddenly  rich — become  possessed  of  ten  millions  in 
United  States  bonds,  besides  much  other  wealth  worth  millions 
more ;  would  not  the  Bank  of  Texas,  under  such  circumstances, 
be  expected  to  pay  its  notes  in  full  ? 

If  it  did  not,  it  would  do  worse  than  our  incorporated  banks  in 
the  United  States  have  done.  They  all,  like  the  Republic  of 
Texas,  issued  notes  in  excess.  They  continued  to  issue  them  at 
various  stages  of  depreciation.  But  all,  such  of  them  as  have  any 
credit  or  character  to  sustain,  have  paid  their  notes  in  full,  without 
regard  to  the  rate  of  depreciation  at  which  they  were  issued. 

The  case  is  not  altered  by  the  fact  that  the  Republic  of  Texas, 
instead  of  establishing  a  separate  bank,  constituted  herself  a  bank 
of  issue. 

"  It  is  pretty  well,''  said  one  Texan,  "  for  the  State  to  pay  as 
much  as  she  does.  Those  who  bought  the  paper  of  a  revolutionary 
government  had  no  right  to  expect  any  more."  This  argument 
is  not  satisfactory.  A  revolutionary  government  is  as  much  bound 
as  is  an  established  government  to  fulfil  its  contracts.  Nothing 
but  inability  will  excuse  either.  And  till  it  can  be  shown  that 
other  revolutionary  governments  have  had  as  ample  means  as 
Texas,  their  defaults  of  payment  will  not  afford  her  even  the  sha 
dow  of  an  apology. 

Another  Texan  is  willing  to  admit  that,  "  if  the  loans  had  been 
in  gold  and  silver,  Texas  would  be  bound  to  pay  in  full ;  but  as 
they  were  obtained  in  another  way,  it  is  quite  enough  if  she  pays 


THE  FISCAL  HISTORY  OF  TEXAS.  257 

in  part.  He  forgets  that,  if  the  loans  had  been  in  gold  and  silver, 
they  would  have  been  expended  for  the  very  articles  of  clothing, 
provisions,  and  munitions  of  war,  that  Texas  obtained  by  the  sim 
ple  intervention  of  her  paper.  Texas  is  as  much  bound  t.o  pay  for 
value  in  kind  as  for  value  in  cash. 

Through  trading  connections,  a  market  was  got  for  Texan  secur 
ities  that  could  not  otherwise  have  been  obtained.  A  man  may 
be  very  unwilling  to  lend  a  government,  especially  a  foreign 
government,  one  hundred  dollars  in  gold  and  silver,  and  yet  be 
ready  to  sell  goods  to  that  value,  and  receive  pay  in  the  obliga 
tions  of  such  government.  Much  more  ready  may  he  be  to  re 
ceive  payment  of  old  debts  in  such  obligations.  In  this  way, 
Texas  borrowed  to  a  large  amount  from  the  people  of  the  United 
States,  and  it  was  the  only  way  in  which  she  could  borrow. 

A  third  Texan  says,  the  holders  of  her  securities  will,  under 
the  scaling  system,  get  more  than  they  expected  when  they  bought 
them,  and  therefore  they  ought  to  be  satisfied.  No  doubt  many 
holders  of  Texan  securities  had,  at  times,  very  faint  hopes  of  their 
ever  being  paid  at  all ;  and  when  they  purchased  such  securities, 
it  must  have  been  at  a  price  which  they  regarded  as  proportionate 
to  the  risk.  But  this  is  not  a  good  reason  that  they  should  not  be 
paid  in  full,  when  the  State  has  ample  ability.  If  the  "  degree  of 
hope"  of  the  creditors  is  to  be  the  standard  of  adjustment,  the 
State  owes  compensation  not  only  to  those  whose  hope  has  been  so 
long  deferred,  but  to  those  who  have  been  doomed  to  absolute  dis 
appointment.  When  hope  was  raised  high  by  the  Texan  official 
announcements  that  General  Hamilton  had  negotiated  a  loan  in 
Europe,  some  men  invested  their  all  in  Texan  securities,  and 
thereby  lost  their  all. 

Besides  this,  it  should  be  recollected  that  the  receipt  of  these 
government  liabilities  was  not  always  matter  of  choice.  It  was  some 
times  matter  of  necessity.  The  government  had  nothing  else  to 
give  its  creditors,  and  they  consequently  had  nothing  else  to  pay  to 
those  to  whom  they  were  indebted.  Texan  securities  had  a  forced 
circulation,  not  through  law,  but  through  circumstances.  As  an 
example,  we  may  mention  the  case  of  a  lady  of  Washington  City, 
who  could  get  nothing  else  from  a  Texan  minister  to  the  United 
States  but  Texan  securities  in  pay  for  his  board.  After  waiting 
IT 


258  THE  FISCAL  HISTORY  OF  TEXAS. 

some  ten  years,  the  Texan  authorities  are  trying,  by  their  scaling, 
to  deprive  this  widow  of  a  great  part  of  her  just  demands. 

The  prospect  that  "speculators"  will  be  enriched,  if  the  State 
pays  her  debts  in  full,  seems,  with  some  Texans,  quite  reason 
enough  why  she  should  pay  only  one-half.  For,  as  already  re 
marked,  growing  rich  by  speculations  in  lands  is  quite  consonant 
with  Texan  principles  of  morality,  because  the  Texans  hold  many 
lands ;  while  growing  rich  by  speculations  in  stocks  is  wicked, 
because  Texans  hold  few  stocks. 

In  our  view,  speculations  in  stocks  are  just  as  conformable  with 
the  principles  of  morality  and  religion,  as  are  speculations  in  lands, 
or  speculations  in  anything  else.  When  men  buy  any  commodity 
with  the  intention  of  reselling  it,  they  do  so  with  the  hope  of  gain. 
At  the  same  time,  they  know  there  is  a  risk  of  loss.  This  was  the 
precise  case  with  those  who  dealt  in  Texan  securities,  and  we  know 
not  why  they,  among  all  dealers  in  commodities,  especially  when 
they  ran  so  great  a  risk  of  loss,  should  alone  be  deprived  of  all 
chance  of  gain. 

The  Texan  Government  had  for  sale  two  kinds  of  merchandise 
— land  and  paper.  Some  took  the  one,  and  some  the  other.  Both 
its  land  and  its  paper  were  then  very  low — the  one  worth,  perhaps, 
ten  cents  an  acre,  the  other  ten  cents  in  a  dollar.  Many  who  took 
the  land  at  these  low  rates  have  done  very  well  by  it,  it  being  now 
worth  two,  five,  ten,  and  twenty  dollars  an  acre.  There  is  no 
murmuring  at  the  good  luck  of  those  who  took  land,  because  it  is 
now  worth  many  times  as  much  as  it  was  ten  years  ago.  Neither 
should  there  be  any  murmuring  at  the  good  luck  of  those  who  took 
paper,  if  it  should  now  be  worth  more  than  it  was  when  they  re 
ceived  it. 

As  there  is  no  law  of  nature  fixing  the  value  of  the  interest  on 
debts,  so  there  is  no  law  of  nature  fixing  the  market  value  of  the 
principal  of  debts.  As  flour  is  sometimes  worth  ten  dollars  a 
barrel,  and  sometimes  only  five,  and  as  cotton  is  sometimes  worth 
twelve  cents  a  pound,  and  sometimes  only  six,  so  stocks  are  sold 
sometimes  at  a  premium,  and  sometimes  at  a  discount.  Public 
securities  are,  as  has  elsewhere  been  observed,  a  merchandise  sub 
ject  to  like  laws  of  prices  with  other  merchandise.  But  these 
general  laws  of  prices  have  particular  effects  on  each  species  of 
merchandise,  according  to  its  particular  nature.  Supposing  the 


THE  FISCAL  HISTORY  OF  TEXAS.  259 

money-market  to  be  the  same  in  other  respects,  government  secur 
ities  rise  or  fall  in  price  according  to  the  supposed  ability  and  the 
supposed  inclination  of  government  to  pay.  Texas  Government 
merchandise  was  low  in  the  market,  because  the  ability  to  pay  at 
all  depended  on  remote  and  uncertain  contingencies.  Texas  secur 
ities  have  since  risen,  because  the  ability  of  the  government  to 
pay  has  been  increased.  But  Texas  securities  have  not  risen  to 
par,  because,  though  the  government  can  pay,  it  will  not. 

But,  supposing  all  the  creditors  of  Texas  to  be  paid  in  full,  and 
that  they  purchased  their  claims  at  second  hand,  and  at  very  low 
rates — have  they,  after  all,  done  so  very  good  a  business  ?  Might 
they  not  have  made  more  money  by  other  investments  ?  Twelve 
per  cent,  interest  may  be  recovered  by  law  in  Texas,  and  as  money 
is  freely  borrowed  at  that  rate,  we  may  rest  assured  that  the  pro 
fits  of  trade  are  rather  above  than  below  it.  At  compound  inte 
rest,  paid  semi-annually,  money,  at  twelve  per  cent.,  will  double 
itself  in  six  years.  The  government  admits  that  it  obtained  the 
equivalent  of  fifty  cents  in  silver  from  those  who  received  its  second 
issues  of  treasury  notes  ;  and,  though  it  promised  interest,  it  ceased 
to  pay  interest,  even  in  paper,  after  the  1st  of  January,  1841.  A 
man  who  gave  one  thousand  dollars  in  specie,  or  its  equivalent, 
for  these  notes,  might,  if  he  had  kept  that  money  in  trade,  have 
made  it  two  thousand  dollars  at  the  end  of  six,  and  four  thousand 
dollars  at  the  end  of  twelve,  years.  But  at  the  close  of  this  pe 
riod,  he  gets  from  the  Texan  Government — how  much  ?  One 
thousand  dollars,  or  exactly  what  he  advanced  twelve  years  ago ! 
The  government  did  promise  to  pay  him  two  thousand  dollars ; 
but  it  pays  only  one  thousand.  It  did  promise  to  pay  him  interest; 
but  it  does  not. 

If  the  matter  be  fairly  investigated,  it  will  be  found  that  those 
Texans  who  kept  their  money  in  trade,  or  who  invested  it  in  lands, 
have  done  much  better  than  those  who  invested  it  in  government 
securities.  The  value  of  money  to  the  man  who  parts  with  it  is 
to  be  estimated  by  what  he  would  have  gained  by  it,  if  he  had 
kept  it  in  his  own  hands. 

In  regard  to  those  citizens  of  the  United  States  who  made  invest 
ments  in  the  securities  of  Texas,  it  will  not  be  hard  to  show  that 
they  could  have  done  much  better  by  employing  their  money  at 
home.  In  evidence  of  this,  we  give  the  following  table.  The  quota- 


260  THE  FISCAL  HISTORY  OF  TEXAS. 

tions  for  1842  are  from  Hunt's  Merchants'  Magazine  for  January, 
1843  ;  those  for  1845  from  the  same  work  for  July,  1845  ;  those 
for  1852  from  the  Journal  of  Commerce,  and  the  Courier  and 
Inquirer : — 

Prices  of  State  Stocks  in  the  New  York  Market. 

Stock.  Interest.          Redeemable.      Price,  April,  1842.         May,  1845.        Nov.  1852. 

New  York  State,  6  1860  82  a  84  108  120 

"        "  5£  1861  77  a  80  104 

"        «  5  1855  75  a  77  106f  114f 

Pennsylvania,  5  31  a  33  73|  96 

Ohio,  6  1856-60       50  a  55  97f  110 

Kentucky,  6  1860  68  a  70  101  f  110 

Alabama,  5  1865  35  a  40  72 £  95 

Indiana,  5  1861  15  a  17  34*  99 

Illinois,  6  1870  15  a  16  39  83 

Maryland,  6  40  a  45  109 

Michigan,  6  1860  15  a  30 

New  York  stocks  were,  March  1,  lower  than  they  were  April  15, 

1842,  five  per  cents,  being  then  68  a  72,  and  five  and  a  half  per 
cents.  71  a  73.     Others  of  the  stocks  above  quoted  were  at  times 
lower  than  they  were  April  15,  1842.     Illinois  sixes  have  been 
sold  at  13. 

It  is  evident  that,  if  a  man  had  bought  these  stocks  at  the  rates 
they  were  in  1842,  and  sold  them  at  the  rates  at  which  they  were 
in  1845  or  1852,  he  would  have  made  immense  sums  of  money. 
But  if  he  had  bought  and  sold  at  shorter  intervals,  his  gains  would 
have  been  proportionally  much  greater. 

New  York  sixes,  in  April,  1842,  averaged  83;  in  April,  1843, 
they  averaged  1  04.  Gain  on  investment  in  one  year  equal  to 
twenty-five  per  cent. 

Ohio  sixes  averaged,  in  April,  1842,  52J;  in  May,  1843,  they 
averaged  86.  Gain  on  investment  in  thirteen  months  equal  to  65 
per  cent. 

Kentucky  sixes  were,  in  April,  1842,  at  69  on  an  average;  in 
May,  1843,  at  95.  Gain  in  one  year  equal  to  36  per  cent. 

Illinois  sixes  were,  in  December,  1842,  18  a  18}  ;  in  May,  1843, 
they  were  29J  a  30J.  Gain  in  the  short  period  of  six  months 
equal  to  61  per  cent. 

Indiana  fives  were,  in  December,  1842,  20  a  21|.     In  May, 

1843,  28  a  30.     Gain  in  six  months  equal  to  38  per  cent. 
Considering  the  quickness  of  the  returns,  any  of  these  stocks 


THE  FISCAL  HISTORY  OF  TEXAS.  261 

were  better  speculative  investments  than  the  best  securities  Texas 
could  offer. 

Such  fluctuations  in  stocks  are  great  evils,  but  where  paper-money 
is  used,  they  are  unavoidable. 

Take  next  the  prices  of  bank  and  other  stocks  at  Philadelphia, 
on  the  1st  of  January,  1842,  and  compare  them  with  their  prices 
in  May,  1845,  and  November,  1852.* 

Banks.  Jan.  1, 1842.  May  2,  1845.  Nov.  1852. 

Pennsylvania,  .  .  150  258  480 
North  America,  .  .  160  380  620 
Philadelphia,  .  .  46  110  140 
Farmers'  &  Mechanics',  29  42J  71 
Commercial,  35  53  65 
Northern  Liberties,  .  25  42  60 
Mechanics',  17  25  33 
Southwark,  48  63  80 
Kensington,  30  57  68 
Penn  Township,  30  29  32 
Girard,  12  8|  13 
Western,  26  46  70 
Manufacturers'  &  Mechanics',  21  23 £  30 
Moyamensing,  32  41 J  75 
New  Orleans  Gas,  .  4  35  125 
Lehigh  Coal  &  Naviga 
tion  (shares),  .  .  10  14J  70 
Lehigh  loans,  6  per  ct.,  40  45  95 
Chesapeake  &  Delaware 

Canal  (shares),           .  5  29  135 
Chesapeake  &  Delaware 

loans,  6  per  ct,          .  20  71  101  £ 
Camden  &  Amboy  Rail 
road  shares,       .  75  110  147 
Norristown  Railroad,  £  7j  45 

Some  of  these  stocks  have  been  sold  at  much  lower  rates  than 
those  mentioned  in  the  first  column.  Philadelphia  Bank  shares, 
for  example,  have  been  sold  at  25 ;  Farmers'  &  Mechanics'  at  19 ; 
Penn  Township  at  20 ;  Mechanics'  at  7  ;  and  Girard  at  2. 

On  stock-jobbing  principles,  the  securities  of  Texas  have  been 
among  the  poorest  investments,  considering  the  risk  attendant 

*  The  prices  for  1842  are  from  the  Journal  of  Banking  ;  those  for  1845  and  1852 
are  from  the  Philadelphia  Commercial  List  and  the  books  of  a  leading  broker.  The 
shares  of  the  Bank  of  Pennsylvania  and  of  the  Bank  of  North  America  were  ori 
ginally  $400  each.  Each  share  has  since  been  divided  into  four,  of  $100  each ;  but, 
to  facilitate  comparison,  we  have  made  our  quotations  as  if  the  shares  had  not  been 
divided. 


262  THE  FISCAL  HISTORY  OF  TEXAS. 

on  them,  and  the  slowness  of  the  returns.  A  man  might  have 
made  more  money  by  investing  in  almost  anything  else. 

It  may  be  that  they  who  have  been  so  unfortunate  as  to  invest 
their  earnings  in  Texan  bonds  and  treasury  notes  would,  if  they 
had  employed  their  money  in  other  ways,  have  lost  instead  of 
gaining.  But  this  does  not,  in  the  least,  affect  the  validity  of 
their  claims.  And  if  Texas  does  not  pay  them  dollar  for  dollar 
what  she  has  promised,  Texas  must  bear  the  infamy  (the  term  is 
not  too  strong) — Texas  must  bear  THE  INFAMY  that  properly  at 
taches  to  men  and  States  that  can  pay  their  debts  and  will  not. 

Nor  will  Texas  bear  this  infamy  alone.  The  whole  family  of 
States  of  which  she  is  a  member  must  share  it  with  her.  An 
American  cannot  now  enter  certain  circles  in  Europe  without  being 
reproached  with  what  Pennsylvania  has  done  in  relation  to  her 
debts.  Yet  Pennsylvania  never  repudiated  one  dollar  of  her  ob 
ligations.  The  most  she  did  was  to  defer  payment  of  the  interest, 
or  pay  in  inconvertible  paper,  till  she  could  bring  a  new  revenue 
system  into  operation,  and  till  her  banks  could  resume  specie  pay 
ments.  This  was  matter  of  stern  necessity.  But  State  credit  is 
like  female  reputation.  The  greatest  circumspection  is  necessary 
for  its  preservation. 

But  we  are  not  without  hopes  that  Texas  will  yet  redeem  her 
character.  If  the  case  of  her  creditors  could  be  fairly  presented 
before  her  people,  we  should  have  no  fears  of  the  result.  But 
there  is  great  difficulty  in  doing  this,  owing  to  the  scattered  state 
of  the  population  and  the  few  persons  in  Texas  who  have  any  in 
terest  in  supporting  the  creditors'  cause.  The  men  of  Texas  are 
just  as  honest  as  the  men  of  France,  England,  or  "Germany,  or  the 
men  of  New  York,  Massachusetts,  or  Virginia.  Their  minds  have, 
unfortunately,  got  a  wrong  twist  on  the  subject  of  their  public 
debt ;  but  all  would  soon  be  right  if  the  truth  could  only  be  fairly 
laid  before  them. 

Already  are  there  indications  of  a  change  of  sentiment.  The 
Texas  State  G-azette  declares  that  the  number  of  those  who  believe 
the  debt  must  ultimately  be  paid  in  full  increases  every  year. 
Attention  has  been  awakened  by  the  cases  of  individuals  to  whom 
gross  injustice  has  been  done  by  the  scaling  system ;  and  the 
further  these  inquiries  are  pushed,  the  greater  will  be  found  to 
be  the  number  of  cases  of  hardship.  What  but  injustice  can  be 


THE  FISCAL  HISTORY  OP  TEXAS.  263 

done  when  debts  are  averaged  ?  How  perfectly  absurd  it  would 
be  in  a  State  to  strike  an  average  of  the  debts  due  to  her !  Not 
less  absurd  is  it  for  one  to  strike  an  average  of  the  debt  due  by 
her. 

It  was  a  monstrous  thing  in  Texas  to  reopen  accounts  which  all 
those  concerned  supposed  had  been  finally  passed  upon  some  eight 
or  twelve  years  previous.  The  reaudit,  if  made  at  all,  should 
have  been  as  careful  as  the  original  audit.  But  this  was  impossi 
ble.  Many  of  the  original  claimants  were  dead  ;  others  had  lost 
their  vouchers  ;  others  had  no  interest  in  seeing  the  audit  fairly 
made,  as  they  had  long  since  parted  with  the  treasury  notes  or  the 
stock  certificates  they  had  received  in  satisfaction  of  their  claims. 

Under  these  circumstances,  it  was  impossible  to  ascertain  the 
exact  value  Texas  had  received  in  each  case,  even  according  to 
her  own  estimate  of  such  value;  and,  as  it  was  thus  impossible  to 
carry  out  the  principles  she  has  adopted,  this  of  itself  is  sufficient 
reason  for  abandoning  it. 

Motives  of  interest  and  motives  of  duty  point  in  this  instance 
in  the  same  direction.  The  celebrated  Col.  Chartres  said  he  would 
give  one  hundred  thousand  pounds  for  a  character — not  for  its  own 
sake,  but  because  he  would  get  two  hundred  thousand  pounds  by 
it.  Texas  will  do  well  in  buying  a  character,  even  if  it  should 
cost  her  ten  million  dollars.  She  would  gain  by  it  one  hundred 
millions.  By  this  is  of  course  meant  a  character  for  paying  debts. 
A  character  for  courage  and  conduct  she  has  already. 

If  the  land-speculating  interest  in  Texas  only  knew  where  its 
true  interest  lies,  it  would  be  foremost  in  abandoning  the  scaling 
system.  No  State  in  the  Union  stands  more  in  need  of  railroads, 
and  in  few  States  could  they  be  made  at  less  expense.  If  the 
whole  five  millions  that  would  be  acquired  by  repudiating  half  the 
public  debt  should  be  applied  to  internal  improvements,  it  would 
go  but  a  little  way  in  constructing  the  works  that  are  wanted.  It 
will  require  many  millions  more  to  construct  the  railroads  which 
are  so  desirable  in  Texas,  and  which  she  will  have  in  a  few  years, 
if  she  now  redeems  her  plighted  faith.  But  if  she  persists  in  re 
pudiating  regularly  audited  debts,  for  which  her  truth  and  honor 
were  solemnly  pledged,  the  whole  world  (that  is,  the  money-lend 
ing  world)  should  unite  in  one  combination  against  her.  Texas 
will  then,  notwithstanding  her  great  natural  advantages,  be  far 


264  THE  FISCAL  HISTORY  OF  TEXAS. 

behind  her  sister  States  ;  for  no  extensive  system  of  railroads  can 
be  completed  without  resort  to  loans. 

We  trust,  however,  in  this  case,  more  to  natural  sentiments  of 
justice  than  to  hopes  of  gain. 

It  is  true,  indeed,  that  the  United  States  are  bound  for  the 
whole  of  the  debt  for  which  the  revenues  were  pledged  ;  but  Texas 
must  evince  a  hearty  concurrence  with  the  United  States  in  the 
payment  of  these  debts,  and  interpose  no  further  obstacles  in  rela 
tion  to  the  reserved  bonds.  In  justice  to  herself,  Texas  must  go 
further.  She  must  repeal  all  her  scaling  acts,  and  pay  the  residue 
of  her  creditors  in  full,  according  to  contract. 

The  case  of  one  class  of  them  is  peculiarly  hard.  We  allude  to 
the  holders  of  eight  and  ten  per  cent,  funded  debt  of  1840.  It  is 
true  that  they  are  the  only  owners  of  circulating  evidences  of  debt 
who  have  as  yet  been  paid  anything;  but  they  have  been  scaled 
most  awfully — down  even  to  thirty  cents  in  the  dollar.  If  some 
thing  be  not  done  for  their  relief,  their  condition  will  be  worse 
than  that  of  any  other  contract  creditors. 

They  have  strong  claims  on  Texas.  From  the  supplement  to 
the  report  of  the  auditor  and  comptroller,  Dec.  27th,  1849,  it 
appears  that  treasury  notes  to  the  amount  of  $777,080  were  in 
vested  in  the  ten  per  cent,  funded  debt  of  1840,  and  notes  of  the 
same  kind  to  the  amount  of  $22,800  in  the  eight  per  cent,  funded 
debt  of  the  same  year.  Thus  the  whole,  or  nearly  the  whole  of 
their  stock  represents  debts  for  which  the  revenues  were  originally 
pledged.  It  will  be  very  hard  if  these  creditors,  having  parted 
with  these  evidences,  and  taken  others  in  exchange  for  them,  in 
order  to  promote  the  convenience  of  the  Republic,  shall  now  be  paid 
only  thirty  cents  in  the  dollar.  If  they  had  retained  their  origi 
nal  evidences,  they  would  have  come  within  that  class  of  creditors 
for  whom,  agreeably  to  the  decision  of  the  President  and  of  the 
Secretary  of  the  Treasury,  the  United  States  are,  in  the  default 
of  Texas,  bound  to  provide. 

Texas  has  still  from  three  to  four  millions  in  her  treasury.  She 
cannot  apply  this  amount,  or  so  much  of  it  as  may  be  necessary, 
in  a  better  way  than  by  making  up  to  the  holders  of  the  funded 
debt  of  1840,  and  others  who  have  been  improperly  scaled,  the 
sum  that  is  justly  their  due. 

If  the  United  States  should  pay  all  the  debt,  the  creditors  would 


THE  FISCAL  HISTORY  OF  TEXAS.  265 

indeed  be  satisfied,  but  the  reputation  of  Texas  would  not  be  left 
without  blemish.  Her  breaches  of  faith  have  been  many.  She 
must  show  to  the  world,  by  her  present  and  her  future  conduct, 
that  those  breaches  of  faith  were  produced  by  necessity,  and  not 
by  inclination,  and  that  if  she  at  any  time  favored  the  scaling  sys 
tem,  it  was  through  want  of  acquaintance  with  the  true  nature  of 
stock  securities.  She  will  thus  effectually  wipe  off  the  reproach  of 
repudiation,  and  take  her  stand  proudly  in  the  foremost  ranks  of 
the  States  of  the  Union. 


APPENDIX. 


A. 

AMOUNT  OF  AUDITED  DRAFTS. 

FROM  Jan.  1,  1836,  to  Dec.  31,  1836,  one  year,*  $502,179  23 

"  Jan.  1,  1837,  to  Dec.  31,  1837,  one  year,*  718,258  98 

"  Jan.  1,  1838,  to  Sept.  30,  1838,  nine  months,*  885,458  61 

"  Sept.  30,  1838,  to  Sept.  30,  1839,  one  year,*  1,370,810  15 

"  Sept.  30,  1839,  to  Sept.  30,  1840,  one  year,f  2,245,244  62 

"  Sept,  30,  1840,  to  Sept.  30,  1841,  one  year,|  1,265,038  70 

"  Sept.  30,  1841,  to  Feb.  19, 1846,  4  yrs.  &  4  mos.,§  694,791  81 

Total  to  February  19,  1846,§  .  .  $7,681,782  10 

The  total  given  by  the  auditor  and  comptroller  does  not  include  the 
drafts  issued  under  the  Exchequer  System. 

A  small  amount  issued  in  1835  appears  to  be  included  in  the  accounts 
of  1836. 

For  two  years,  these  audited  drafts  were,  with  the  exception  of  land- 
script,  the  only  governmental  paper  tender;  yet  the  amount  redeemed  in 
these  years,  by  receiving  them  in  payment  of  public  dues,  appears  to  have 
been  only  $8,687  97,  besides  $16,134  02,  redeemed  by  drafts  on  agents  in 
the  United  States. 

As  before  the  close  of  these  two  years,  the  amount  of  audited  drafts 
afloat  considerably  exceeded  one  million  dollars,  and  as  they  had  in  May, 
1837,  fallen  so  low  as  to  be  worth  only  fifteen  cents  in  the  dollar,  this  fact 
affords  indubitable  evidence  that  the  Texans  of  those  days  had  little  dispo- 

*  First  Auditor's  Report,  October  25,  1839. 

f  Comptroller's  Report,  October  1,  1840. 

J  Secretary  of  the  Treasury's  Report,  October  20,  1841. 

\  Supplement  to  Auditor  and  Comptroller's  Report,  December,  1840.  The  amount 
from  September  30,  1841,  to  February  19,  1846,  has  been  obtained  by  deducting 
from  the  total  the  amounts  that  were  issued  previous  to  September  30,  1841. 


268  APPENDIX. 

sition  to  pay  taxes,  or  that  those  whose  business  it  was  to  collect  them 

were  strangely  negligent  of  their  duty. 

This  table  is  the  best  we  can  give  of  the  expenditures  of  the  Texan 

Government  in  different  years.     By  scanning  it,  the  reader  will  find  that 

in  those  years  in  which  the  exigencies  of  the  government  were  the  least, 

its  expenditures  were  the  greatest. 

According  to  the  supplement  to  the  auditorial  report  of  December,  1849, 

the  final  disposition  of  these  drafts  was  as  follows  : — 

Received  in  payment  of  public  dues,      .         .         .         $636,322  66 
Invested  in  ten  per  cent,  fund  of  1837,          .         .  837,50000 

"             «            «            of  1840,          .         .  45,600  00 

Amount  paid  at  the  treasury,        ....        5,985,131  21 
Leaving  unliquidated, 177,228  23 

The  reader  must  not  suppose  that  the  amounts  paid  at  the  treasury 
were  paid  in  gold  and  silver.  Giving  treasury  notes  in  exchange  for  au 
dited  drafts  was  called  paying  them. 

In  addition  to  the  above,  outstanding  claims  to  the  amount  of  $72,077  28 
have  been  audited  by  virtue  of  a  special  act  of  the  Legislature  at  its  second 
session ;  and,  by  virtue  of  other  special  acts,  other  claims  to  the  amount  of 
some  two  hundred  thousand  dollars  have  been  brought  in,  and  duly 
audited. 


B. 

PROMISSORY  NOTES. 

First  emission,  printed  notes,  Nov.  4,  1837,  to  Jan.  15,  1838,*    $514,510 

Second  emission,  engraved  notes,  Jan.  15, 1838,  to  Nov.  3, 1838,*  436,289 

"  "  «  Nov.  3,  1838,  to  Jan.  1,  1839,f  214,340 

Third  emission,  "red  backs,"  Jan.  1, 1839,  to  Sept.  30, 1839/f  1,569,010 

"          "          "  Sept.  1839,  to  Sept.  1840,J          1,983,790 


Total, $4,717,939 

This  does  not  include  reissues. 

*  Report  of  Secretary  of  the  Treasury,  November  3,  1838. 

f  Ibid.,  1839. 

J  Supplement  to  Report  of  Auditor  and  Comptroller,  December,  1849. 


APPENDIX.  269 

The  amount  issued  subsequently  to  September,  1839,  has  been  ascer 
tained  by  deducting  from  the  total  the  amounts  that  appear  to  have  been 
issued  previous  to  September,  1839. 

Probable  Amounts  in  Circulation. 

September  30,  1838,*  ....  $684,069  59 

November  3,  1838,*  ....  812,454  00 

September  30,  1839,f  ....  2,013,762  55 

September  30,  1840,j  ....  3,287,962  42 

September  30,  1841,J  ....  4,381,004  64 

January  1,  1850,§  ....  664,593  00 

November  12,  1851,§  .         .         .         .  296,353  00 

The  scale  finally  adopted  by  the  auditor  and  comptroller,  for  estimating 
the  value  the  government  received  in  exchange  for  its  treasury  notes,  was 
as  follows : — 

July,  1838,  to  November,  1838,         ...     80  cents  in  the  dollar. 
November,  1838,  to  March,  1839,      ...     60          "  " 

March,  1839,  to  July,  1839,     ....     50          «  « 

July,  1839,  to  November,  1839,         .         .         .33$        "  " 

November,  1839,  to  March,  1840,      ...     25          "  " 

March,  1840,  to  June,  1840,     ....     20          «  " 

After  June,  1840,     .......     16|        "  " 

i 

Up  to  July,  1838,  they  appear  to  have  been  estimated  as  of  par  value 
with  silver.  As  mentioned  in  other  parts  of  the  volume,  they  subsequently 
fell  to  two  cents  in  the  dollar ;  but  then  they  had  ceased  to  be  paid  out  by 
the  government. 

From  the  Supplement  to  the  Report  of  the  Auditor  and  Comptroller,  De 
cember  27, 1849,  we  gather  the  following  particulars  respecting  these  trea 
sury  notes : — 

Redeemed  at  the  treasury,  and  cancelled,     ....  $772,439 

Invested  in  ten  per  cent,  stock  of  1840,      .         .         .         .  777,080 

"       in  eight  per  cent,  stock  of  1840,    ....  22,800 

Received  in  collection  of  revenue,  and  destroyed,           .         .  483,074 

Due  by  collectors,  and  likely  to  be  paid  over,        .         .         .  165,000 

*  Report  of  Secretary  of  the  Treasury,  November  3,  1838. 

f  Ibid.,  1839. 

J  Various  public  documents.  In  the  total  for  1841,  treasury  bonds  are  included. 
In  his  report  of  October,  1841,  Secretary  Chalmers  states  there  had,  in  that  year, 
been  no  new  emission  of  treasury  notes. 

\  Reports  of  Auditor  and  Comptroller. 


270 


APPENDIX. 


Like  the  audited  drafts,  not  one  dollar  of  these  treasury  notes  was  paid 
in  specie.  They  were  paid,  or  redeemed,  at  the  treasury,  after  the  manner 
of  the  Kilkenny  banker,  by  giving  new  notes  for  old  ones. 


c. 

REVENUES  OF  THE  REPUBLIC  OF  TEXAS  FROM  SEPTEMBER,  1835,  TO 
OCTOBER,  1851. 


Three  years,  ending 

One  year,  ending 

One  year,  ending 

Sept.  30,  1838. 

Sept.  30,  1839. 

Sept.  30,  1840. 

Customs       .     .     . 

.  $133,649  88 

$122,169  35 

$166,821  12 

Direct  taxes      .     . 

.     100,455  12* 

Lands  and  land  dues 

13,920  75f 

123,224  66J 

Town  lots     .     .     . 

7,202  40 

5,287  50 

168,797  52 

Miscellaneous   .     . 

3,195  00 

55,473  43 

1,828  56 

Total     .     .     . 

.  $258,423  15 

$182,930  28 

$460,671  86 

One  year,  ending 

Three  years, 

Fourteen  months, 

Sept.  30,  1841. 

1842-3-4.           NOT 

.1,1844,  to  Jan.  1,1845. 

Customs       .     .     . 

.  $151,990  45 

$360,177  46 

$340,506  40 

Direct  taxes      .     . 

.     179,503  91 

80,335  39 

27,561  49 

Licenses       . 

42  686  37 

16,503  50 

15,140  16 

Lands  and  land  dues 

68,025  62 

Miscellaneous   .     . 

429  32 

502  58 

1,815  25 

Total     .     .     . 

.  $442,635  67 

$457,518  93 

$385,023  30 

Twenty-two  months, 

Two  years,  ending 

Two  years,  ending 

Feb.  19,  1845,  to  Dec.  31,  1847. 

Oct.  31,  1849. 

Oct.  31,  1851. 

Customs       .     .     . 

.     $51,206   13 

$8,075  13 

$13,446  99 

Direct  taxes      .     . 

.       21,154  87 

12,882  20 

8,790  34 

License-taxes    .     . 

7,692  29 

3,833  53 

2,092  09 

Lands  and  land  dues 

19,708  27 

Town  lots     .     .     . 

475  00 

Miscellaneous   .     . 

.       29,596  00$ 

75,363  98 

343  00 

Total     ....  $109,649  29  $100,154  84  $44,855  69 

The  whole  amount  of  revenue  collected  in  the  two  years  beginning  Sep 
tember  30,  1835,  and  ending  September  30,  1837,  appears  to  have  been 
only  $9,607  28,  leaving  $248,815  87  as  the  revenue  proper  to  the  year 
ending  September  30,  1838. 

*  Part  for  land  dues  and  licenses. 

|  Part  for  licenses. 

J  Including  licenses  and  land-tax. 

\  Including  $26,922  57  claims  against  United  States  Government. 


APPENDIX. 


271 


This  table  must  not  be  regarded  as  official,  though  it  has  been  formed 
from  official  documents.  It  is  defective,  in  one  place,  in  containing  no 
account  of  the  receipts  from  January  1  to  February  19,  1846,  and  has  a 
surplusage  in  another,  inasmuch  as  it  embraces  twice  the  receipts  from 
October  31,  1847,  to  December  31, 1847,  and,  perhaps,  those  from  Novem 
ber  1,  1844,  to  January  1,  1845.  It,  however,  approximates  near  enough 
to  correctness  for  purposes  of  comparison. 

There  are  discrepancies  in  some  of  the  documents,  owing  to  changes  in 
modes  of  keeping  accounts,  consequent  on  frequent  changes  of  officers  in 
times  of  trouble.  After  the  officers  of  the  Treasury  Department  of  Texas 
shall  have  got  through  the  arduous  duty  of  paying  off  the  public  debt,  they 
may  find  a  revision  of  the  revolutionary  accounts  of  the  Republic  not  un 
worthy  of  their  attention,  provided  the  Legislature  make  an  appropriation 
for  the  necessary  expense. 


D. 


RECAPITULATION   OF   REVENUE   OF    THE    REPUBLIC    OF   TEXAS,    SHOWING 
THE  TOTAL  AMOUNT  OF  EACH  BRANCH. 


1835-38 

1838-39 

1839-40 

1840-41 

184*2-3-4 

1844-46 

1846-47 

1847-49 

1849-51 


Customs. 
$133,649  88 
122,169  35 
166,821  12 
151,990  45 
360,177  46 
340,506  40 

51,206  13 
8,075  13 

13,446  99 


Total    $1,348,042  91 

Lands  and  land  dues. 

1835-39  $13,920  75f 

1839-40  123,224  66J 

1840-41  68,025  62 

1849-51  19,708  27 


Total       $224,879  30 


Direct  taxes. 

183'5-39  $100,455  12* 

1840-41  179,503  91 

1842-3-4  80,335  39 

1844-45  27,561  49 

1846-47  21,154  87 

1847-49  12,882  20 

1849-51  8,790  34 


Total         $430,683  32 


Licenses. 

1840-41 

$42,686  37 

1842-3-4 

16,503  50 

1844-46 

15,140  16 

1846-47 

7,692  29 

1847-49 

3,833  53 

1849-51 

2,092  09 

Total  $87,947  94 


*  Part  land  dues  and  licenses. 

f  Part  for  licenses. 

J  Including  licenses  and  land-tax. 


272 


APPENDIX. 


Sales  of  town  lots.* 

1835-38  $7,202  40 

1838-39  5,287  50 

1839-40  168,797  52 

1849-51  475  00 


Total       $181,762  42 


Miscellaneous. 

1835-38  $3,195  00 

1838-39  55,473  43 

1839-40  1,828  56 

1840-41  429  32 

1842-3-4  502  58 

1844-46  1,815  25 

1846-47  29,596  00 

1847-49  75,363  98 

1849-51  343  00 

Total  $168,547  12 


RECAPITULATION. 

Customs $1,348,042  91 

Direct  taxes 430,683  32 

Lands  and  land  dues 224,879  30 

Licenses' 87,947  94 

Miscellaneous        168,547  12 

Town  lots 181,762  42 

Total $2,441,863  01 

SUMMARY  OF  DIFFERENT  PERIODS. 

1835-37 $9,607  28 

1837-38 248,815  87 

1838-39 182,930  28 

1839-40 460,671  86 

1840-41 442,635  67 

1842-3-4 457,518  93 

1844-46 385,023  30 

1846-47 109,649  29 

1847-49 100,154  84 

1849-51 44,855  69 


Total $2,441,863  01 

A  joint  committee  of  the  Legislature  of  the  State  reported,  February  7, 
1850,  that  there  were  due,  by  sundry  officers  of  the  late  Republic  of 
Texas,  various  sums,  amounting  in  all  to  $73,601  06  in  par  funds,  and 
$187,297  19  in  Texas  promissory  note  funds,  including  interest  at  eight 
per  cent,  per  annum,  and  after  allowing  all  the  credits  claimed  by  said 
officers.  They  further  reported  the  whole  amount  of  unsettled  accounts  as 
being  $473,394  53  in  promissory  notes,  and  $142,612  19  in  par  funds. 
Total,  $616,006  92. 


*  These  were  Galveston  and  Austin  city  lots. 


APPENDIX.  273 

E. 

KIND  OF  FUNDS  RECEIVED. 

According  to  the  best  accounts  we  can  gather,  the  revenue  of  the  Repub 
lic  of  Texas  was  received  in  the  form  following,  to  wit : — 

Audited  drafts* $636,322  66 

Treasury  notes*          .         .         .    '     .         .         .         .  648,074  00 

Treasury  bonds* 40,100  00 

Ten  per  cent,  stock* .  10,000  00 

Land-scriptf .  7,336  47 

Exchequer  bills,  1842-46J 271,351  76 

Exchequer  bills,  specie,  &c.J 70,005  44 

Par  funds,  1842-46J 275,420  14 

Specie,  1842  to  Feb.  19,  1846J           ....  10,440  49 

Special  drafts,  1842-46J 33,855  52 

Property  taken  in  payment  for  taxesj            .         .         .  8,016  14 

Exchequer  bills,  and  special  drafts,  1847-49§       .         „  1,586  45 

Specie,  Feb.  20,  1844,  to  Oct.  31,  1849§     .         .         .  125,292  36 

Exchequer  bills,  and  special  drafts,  1849-51 1|        .         .  1,765  42 

Specie,  1849-51||       .         .  3,821  01 

Audited  paper  and  promissory  notes,  1849-51||     .         .  39,270  01 

Total  revenue  of  Republic  from  taxes      .         .      $2,182,657  87 
From  Bank  of  United  States  : — J 

In  checks  of  loan  commissioners,  payable  Sept.  30,  1839  $80,000  00 

In  post-notes  of  U.  S.  Bank,  payable  Jan.  1,  1840        .  200,000  00 

Acceptances  in  favor  of  J.  P.  Henderson      .          .          .  10,000  00 

Government  drafts  on  Hamilton  and  Burnley,  1840       .  158,495  98 

Funds  from  same  source  in  fiscal  year,  1841          .         ,  4,776  00 

"             "             "              "            "    balance       .  4,108  02 

Brookfield  loan,  1S35H" 1,100  00 

Triplet  loan  (1836),  specie^         .                  ...  20,070  00 

Erwin  loan  (1836),  speciej          .                            .         .  45,820  00 

Total  revenue  of  Republic  from  taxes  and  loans      .      $2,707,027  87 

*  Supplement  to  Auditorial  Report,  Jan.  1,  1850. 

f  Report  of  Henry  Smith,  Secretary  of  the  Treasury. 

J  Manuscript  Records  of  Texas  Treasury  Department. 

\  Treasurer's  Report,  Nov.  16,  1849. 

||  Comptroller's  Report,  Nov.  14,  1851. 

^[  Journal  of  Provisional  Government. 

18 


274  APPENDIX. 

This  includes  the  amount  collected  by  the  State  for  arrears  to  the  Re 
public. 

With  the  exception  of  the  one  thousand  dollar  note,  referred  to  in  an 
early  part  of  our  history,  the  post-notes  above  mentioned  were  the  only 
bank-notes  that  appear  ever  to  have  come  into  possession  of  the  Republic 
of  Texas,  and  they  never  approached  nearer  its  treasury  than  the  city  of 
New  Orleans.  There  they  were  sold ;  some  of  them  at  a  net  discount. 

We  cannot  find  from  the  records  that,  previous  to  the  adoption  of  the 
Exchequer  System,  the  government  ever  realized  one  dollar  of  its  taxes  in 
specie.  But  we  learn  from  undoubted  authority  that  $8  30  were  actually 
paid  in  for  land  dues  in  "  hammered"  silver.  This  treasure  gave  the  account 
ing  officers  great  trouble.  They  could  not  pay  it  out,  for  that  would  have 
been  making  an  improper  distinction  among  the  public  creditors.  They 
were  obliged  to  keep  it,  and  also  to  keep  a  distinct  account  of  it — a  separate 
entry  of  it  being  necessary  in  each  general  statement. 

After  the  Exchequer  System  was  adopted,  the  returns  were  made  in  such 
a  way  that  it  is  impossible  to  say  exactly  how  much  specie  was  received. 
So  many  kinds  of  "funds"  are  the  equivalents  of  "specie,"  that  the  expres 
sion  "par  funds"  is  very  indefinite.  Possibly,  some  government  drafts  on 
the  depositories,  received  in  payment  of  public  dues,  are  included  in  the 
total.  The  principle  of  "  set-offs,"  properly  understood  and  properly  ap 
plied,  is  an  excellent  one;  but  it  is  so  liable  to  abuse  that,  whenever  it  is 
used,  the  treasury  records  should  show  how,  and  to  what  extent  it  is  applied. 
A  government  draft  may  be  the  equivalent  of  specie,  but  yet  it  is  not  the 
same  as  specie.  If  a  public  treasurer  pays  out  specie,  there  is  an  end  of 
the  transaction.  But  if  he  gives  a  draft  on  a  distant  depository,  it  may 
remain  out  for  months,  perhaps  for  years. 

In  the  year  1842,  the  Texan  Government  adopted  the  practice  of  draw 
ing  drafts  on  its  collecting  officers,  and  making  them,  by  special  enactments, 
receivable  for  certain  public  dues.  They  were  known  by  different  names, 
as  "assessors'  drafts,"  "Henderson  drafts,"  &c.,  according  to  the  name  of 
the  person  whose  claim  they  were  issued  to  discharge,  or  the  purpose  they 
were  intended  to  serve.  We  have  included  them  in  the  table,  so  far  as  we 
could  trace  them,  under  the  head  of  "  special  drafts."  Of  drafts  of  this  kind, 
of  which  special  mention  is  made,  from  1842  to  Jan.  1,  1846,  amounting 
to  $51,402  86,  there  remained  outstanding,  on  the  1st  of  Jan.  1846, 
$17,547  34.  The  treasurer,  on  paying  them  out,  credited  himself  as  with 
so  much  specie  j  but  that  they  were  not  the  same  as  specie  (though  they 
may  have  been  its  equivalent)  is  sufficiently  proved  by  the  fact  that  some 
of  these  drafts  were  not  paid  till  1849-51,  and  some  of  them  may  be  out 
standing  yet. 

It  will,  perhaps,  be  remarked  that,  while  the  gross  revenues  of  the  Repub- 


APPENDIX. 


275 


lie  amounted  to  $2,441,863  01,  according  to  Appendix  D,  the  table  in  Ap 
pendix  E  shows  in  what  kind  of  funds  the  amount  of  only  $2,182,657  87 
was  received.  The  difference  is  $259,205  14.  A  part  of  this  sum,  but 
not  probably  a  large  part,  was  received  in  exchequer  bills  between  Jan.  1, 
1846,  and  Oct.  31, 1847.  But  the  principal  part  was  probably  in  treasury 
notes,  which  had  been  received  once  before  in  payment  of  dues,  and  then 
reissued.  The  auditor  and  comptroller,  in  their  report  of  Jan.  1850,  give 
only  "the  amount  of  treasury  notes  received  in  collection  of  the  revenue, 
and  destroyed" — not  the  amount  thus  received  and  reissued. 


F. 


TABULAR  VIEW  OP  THE  DEBT  OF  TEXAS  AT  DIFFERENT  PERIODS. 

Sept.  30,  1838. 

Audited  drafts  .  .  .  $775,255  73 
Treasury  notes  and  bonds  684,069  59 
Funded  debt  ....  427,200  00 
Five  million  loan  . 


Sept.  30,  1839. 
$284,841  37 
2,013,762  45 
803,479  53 

Sept.  30,  1840. 

$175,209  86 
3,387,962  42 
1,617,069  00 
305,261  00 

$1,886,525  32*    $3,102,083  35f    $5,485,502  28J 


Sept.  30,  1841. 

Audited  drafts $193,643  53 

Treasury  notes  and  bonds 4,381,004  64 

Funded  debt 1,672,300  00 

Five  million  loan 457,380  00 

Naval  debt 1,000,000  00 


Nov.  12, 1851. 

$116,828  99 

2,967,993  00 

1,418,777  23 

457,380  00 

475,907  00 


$7,704,328  17§    $5,436,886  22|| 

Interest $3,150,246  70 

Claims  filed,  but  not  audited 1,060,120  22 

Claims  not  filed 2,789,738  20 


$12,436,991  34|| 

This  table  must,  in  some  of  its  particulars,  be  regarded  as  only  an  ap 
proximation  to  the  truth,  for  it  was  not  always  possible  for  the  officers  of 

*  Treasurer's  Report  for  1838. 

f  Treasurer's  Report  for  1839. 

J  Stock  Commissioner's  Report  and  Secretary  of  Treasury's  Report  for  1840. 

§  Secretary  of  Treasury  and  Treasurer's  Report  for  1841.  Mr.  Chalmers  esti 
mates  the  naval  debt  at  $1,000,000,  including  the  bonds  forfeited  and  the  interest. 

j|  Auditor  and  Comptroller's  Report  of  November  12,  1851.  For  particulars,  see 
the  report  at  length  in  Appendix. 


276  APPENDIX. 

the  Republic  to  ascertain  the  exact  amount  due,  but  it  is  sufficiently  correct 
to  serve  the  purposes  of  comparison. 

We  could  find  no  statements,  from  which  to  form  a  table  of  the  public 
debt,  of  a  later  date  than  September,  1841,  till  we  came  to  the  auditorial 
reports  of  1850  and  1851.  Probably  both  government  and  people  became 
tired  of  thinking  about  what  they  could  not  pay.  Very  little  appears  to 
have  been  added  to  the  capital  of  the  debt  after  1841,  for  the  very  good 
reason  that  the  credit  of  Texas  was  by  that  time  so  exhausted  that  she 
could  borrow  no  more.  The  increase  since  that  time  has  been  chiefly 
owing  to  increments  of  interest,  and  to  the  bringing  in  of  old  claims  not 
before  presented. 

Of  the  claims  not  filed,  it  is  probable  that  only  a  part  will  be  presented, 
owing  to  the  death  of  the  parties  in  some  instances,  and  the  loss  of  vouchers 
in  others. 

It  may  also  be  expected  that,  owing  to  the  loss  of  treasury  notes,  bonds, 
and  certificates  of  stock,  payment  of  only  part  of  the  certified  debt  will  be 
demanded. 

The  following  amounts  of  ascertained  claims  appear  not  to  have  been 
filed  with  the  auditor  and  comptroller  on  the  12th  of  November,  1851 : — 

Ten  per  cent,  bonds  of  1837 $185,502  77 

1840 63,000  00 

Eight   "  "  "       2,800  00 

Treasury  bonds 43,000  00 

Treasury  notes 296,353  00 

Five  million  loan 280,000  00 


$870,655  77 

RECAPITULATION  OF  PUBLIC  DEBT  OF  TEXAS. 

April  11,  1837* $570,163  44 

Nov.   30,  1837* 1,090,986  45 

Sept.  30,  1838     .     '. 1,187,525  32 

»         1839 3,102,083  35 

1840 5,485,502  28 

1841 7,704,328  17 

Nov.   12,  1851 12,436,991  34 

*  Report  of  Henry  Smith,  Secretary  of  the  Treasury.     The  debt  in  April  and 
November,  1837,  consisted  exclusively  of  audited  paper. 


APPENDIX. 


277 


G. 


IMPORTS  AND  EXPORTS  OF  THE  REPUBLIC  OF  TEXAS. 


From 

United  States 

Great  Britain  and  Ireland 

France   

Germany 

Spanish  West  Indies      .     . 
British  West  Indies  .     .     . 

Belgium 

Hanse  Towns        .... 
Austrian  Adriatic  dominions 

Yucatan 

Sardinia 


Year 

July 

$412, 

32, 

7, 

12, 


IMPORTS. 

ending 
31, 1843. 
,983  03 

474  57 
425  17 
592  73 

729  82 


Year  ending 

July  31, 1844. 

$593,225  14 

51,059  89 

5,524  58 

148  87 

3,624  10 

3,516  48 

27,494  54 

1,185  86 

663  57 


Fifteen  months,  end 
ing  Oct.  31, 1845. 
$1,151,733  21 
9,466  73 
2,048  00 

11,184  65 
3,722  08 

20,634  01 
5,113  94 


467  70 


Total $471,205  32      $686,443  03      $1,204,370  32 


EXPORTS. 
Year  ending 
To                             July  31,  1843. 
United  States                         $281  342  64 

Year  ending 
July  31,  1844. 

$249  151   62 

Fifteen  months  end 
ing  Oct.  31,  1845. 
$486  327  16 

Great  Britain  and  Ireland         76,028  64 
France  ...                .     .             260  00 

205,345  05 
15  435  00 

103,484  10 
8  650  00 

Germany    41,710  85 
Spanish  West  Indies      .     .       16,426  62 
Hanse  Towns        .... 
Austrian  Adriatic  dominions 
Yucatan 

1,031  24 
112,095  46 

29,013  85 
3  047  12 

23,262  25 
85,581  16 
13,468  97 

Belgium      

49  434  48 

British  West  Indies  .     .     . 
Sardinia 

1,455  04 

57  551  88 

/Total $415,768  75      $615,119  34         $829,215  04 

This  table  is  of  interest  in  showing  the  countries  with  which  Texas 
traded,  and  the  proportion  of  her  trade  with  each,  during  the  days  of  her 
independence.  It  is  matter  of  regret  that  the  table  does  not  embrace  all 
the  years  of  the  Republic.  A  summary  of  the  exports  and  imports  of 
several  other  years  will  be  found  in  the  adjoining  table. 


278 


APPENDIX. 


From  September,  1835,  to  September  30,  1838  (3  years)  $1,740,376  87 

"  September,  1838,  to  September  30,  1839  (1  year)  1,506,897  67 

"  September,  1839,  to  December  31,  1840  (15  months)  1,378,568  98 

"  December,  1840,  to  December  31,  1841  (1  year)  No  returns 

"  December,  1841,  to  July  31,  1842  (7  months)  No  returns 

"  July,  1842,  to  July  31,  1843  (1  year)  471,205  32 

"  July,  1843,  to  July  31,  1844  (1  year)  686,503  03 

"  July,  1844,  to  October  31,  1845  (15  months)  1,204,370  32 

EXPORTS. 

From  September,  1835,  to  September  30,  1838  (3  years)  $183,323  00 

"  September,  1838,  to  September  30,  1839  (1  year)  274,518  09 

"  September,  1839,  to  December  31,  1840  (15  months)  220,401  15 

"  December,  1840,  to  December  31,  1841  (1  year)  No  returns 

"  December,  1841,  to  July  31,  1842  (7  months)  No  returns 

"  July,  1842,  to  July  31,  1843  (1  year)  415,768  75 

"  July,  1843,  to  July  31,  1844  (1  year)  615,119  34 

"  July,  1844,  to  October  31,  1845  (15  months)  839,215  00 

The  returns  for  the  years  1838,  1839,  and  1840  (when  the  treasury 
notes  were  in  use)  illustrate  the  effect  paper-money  has  in  encouraging 
imports  and  discouraging  exports;  while  those  for  1843,  1844,  and  1845 
(after  the  treasury  note  system  had  exploded)  show  the  effect  hard-money 
has  in  discouraging  imports  and  encouraging  exports. 


H. 

RECEIPTS  FROM  CUSTOMS  DURING  THE  YEAR  ENDING  JULY  31,  1844. 


Districts.             Paid  in 
par  funds. 

Paid  in 
exchequer  bills. 

Remaining 
Yalue  of         secured  in  store 
excheq.  bills,    out  of  this  year's 

Total  of  net 
revenue  at 
tariff  rates. 

imports. 

Galveston       $65, 

733  17 

$86,379  06 

$74,427  29 

$1,130  50 

$£11,290  96 

Brazos 

659  37 

1,496  30 

1,269  18 

1,928  55 

Calhoun               5,519  07 

10,568  51 

9,702  96 

4,417  87 

19,639  90 

Aransaso 

513  34 

671,38 

1,184  72 

Sabine 

581  33 

76  37 

48  35 

629  68 

San  Augustine 

292  85 

6,512  72 

5,920  28 

8G3  99 

7,077  12 

Red  River 

4,118  55 

4,118  55 

1,992  37 

6,110  92 

Total       $73,299  13 


,151  51     $95,486  61      $9,076  11     $177,861   85 


APPENDIX.  279 


I. 

STATEMENT  SHOWING  THE  WHOLE  AMOUNT  OF  EXCHEQUER  BILLS  ISSUED 
BY  THE  TREASURY  DEPARTMENT. 

Number  of  bills.  Of  what  denomination.  Amount  issued. 

300 

499 

899 
2,698 
7,196 
1,000 
1,000 
2,000 
3,800 
3,800 
7,600 
7,600 


From  which  must  be  deducted  the  following  amounts,  to  wit : — 

Amount  destroyed  at  different  times,  under  the  provisions  of 

the  act  approved  January  29,  1842 $64,865  00 

Amount  in  the  treasury  at  this  time 17,600  00 

Probable  amount  in  the  hands  of  receiving  officers    .     .     .          54,816  71 


$100  00 

$30,000 

50  00 

24,950 

20  00 

17,980 

10  00 

26,980 

5  00 

35,980 

3  00 

3,000 

2  00 

2,000 

1  00 

2,000 

75 

2,850 

50 

1,900 

25 

1,900 

12* 

950 

$150.490 

$137,281  71 
Probable  amount  in  circulation $13,208  29 

TREASURY  DEPARTMENT,  WASHINGTON,  j  P.  B.  MILLER, 

December  4,  1843.  j  Secretary  of  Treasury. 

RATES  OF  VALUE  OF  EXCHEQUER  BILLS,  JULY  31,  1843,  TO  JULY  31,  1844. 


San 

Red 

During 

quarters  ending 

Galveston.     Brazos. 

Calhoun. 

Sabine.     Augustine. 

River. 

1843 

,  October  31 

60 

60 

60            75 

100 

1844 

,  January  31 

100            82£ 

100 

75 

100 

« 

80            80 

100 

April  30 

100 

70 

75 

100 

« 

80 

80 

it 

70 

100 

•< 

60 

tt 

50 

July  31 

60 

60 

80          100 

100 

" 

75 

75 

« 

80 

80 

« 

70 

280  APPENDIX. 

From  August  1,  1844,  to  October  31,  1845  (fifteen  months),  the  value 
of  exchequer  bills  was  as  follows  : — 

At  Galveston 80,  90,  80,  90,  95,  100 

"  Brazos 80,  90 

"  Callioun 80,  100,  80,  90,  100 

"  other  places 100 


K. 

THE  PUBLIC  LANDS  AND  LAND-SCRIPT. 

Mr.  Gr.  W.  Smyth,  the  Commissioner  of  the  General  Land-Office,  says, 
in  a  report  dated  November  1,  1849  : — 

"On  the  subject  of  land-script,  I  have  received,  through  the  politeness  of 
James  B.  Shaw,  Esq.,  Comptroller,  a  statement  of  1,220,387s  acres,  the 
amount  sold  by  the  various  agents  of  the  government,  or  unaccounted  for 
by  them,  and  supposed  to  be  sold:  to  which  I  have  added  108,816,  issued 
by  this  office,  by  virtue  of  an  act  approved  February  5,  1841,  making  an 
aggregate  of  1,329,203  acres." 

The  Triplet  loan  of  January  11,  1836,  of  $20,070,  was  liquidated  by  a 
grant  of  153,357  acres;  and  the  Erwin  loan  of  $45,820,  with  $6,170  44 
added  for  interest,  was  liquidated  by  a  grant  of  121,589  acres  of  land,  and 
by  a  payment  of  about  five  thousand  dollars  in  money  to  the  heirs  of 
Erwin  in  February,  1852. 

The  sales  made  by  the  agents  abroad,  and  the  liquidation  of  the  Erwin 
and  Triplet  loans,  appear  to  have  been  the  chief  fiscal  aid  Texas  derived, 
during  her  revolutionary  struggle,  from  her  immense  territorial  possessions, 
except  in  so  far  as  they  enabled  her  to  recruit  her  armies  by  land  bounties 
to  the  soldiers. 

An  act  of  February  5,  1841,  authorized  any  holder  of  promissory  notes, 
bonds,  funded  debt,  or  any  other  liquidated  claim  against  the  government, 
to  surrender  the  same  and  receive  in  lieu  thereof  land-script,  at  the  rate  of 
two  dollars  an  acre.  In  accordance  with  this  provision,  as  appears  from 
the  report  of  the  Land-Office  Commissioner,  quoted  above,  script  to  the 
amount  of  108,816  acres  had  been  issued  up  to  November,  1849,  thus 
redeeming  $217,632  of  public  liabilities.  But,  on  the  other  hand,  it 
appears,  from  the  Auditorial  Keport  of  January  1,  1850,  that  $66,400  of 
ten  per  cent,  stock  of  1837  had  been  issued  in  exchange  for  land-script; 


APPENDIX.  281 

thus  reducing  the  net  amount  of  government  liabilities,  redeemed  in  this 
way,  to  $151,232. 

The  advantage  derived  from  the  1,220,000  acres  sold  abroad  by  agents 
it  is  not  easy  to  estimate.  Returns  were  received  for  part  of  the  same  in 
necessary  supplies.  Another  part,  by  absorbing  some  of  the  treasury  notes 
and  bonds  thrown  into  the  Mobile  and  New  Orleans  market,  aided  in  sus 
taining  the  value  of  Texan  securities  in  the  United  States. 

The  following  statement  in  a  Texan  newspaper,  made  professedly  on  the 
authority  of  a  public  document,  which  appears  not  to  have  been  printed, 
embraces  the  latest  information  we  have  met  with  respecting  the  public 
lands  of  Texas : — 

"  A  report  of  the  late  Commissioner  of  the  General  Land-Office  gives  a 
very  lucid  and  satisfactory  exposition  of  the  present  condition  of  Texas 
land  affairs,  showing  the  amount  of  lands  titled  by  Spain  and  Mexico;  as 
also  the  quantity  that  has  been  patented  by  Texas — the  amount  set  apart 
for  universities,  colleges,  and  common  schools — and  the  amount  now  on 
hand. 

"By  the  act  of  1836,  Texas  had  379,054  square  miles,  or  242,594,550 
acres.  There  was  ceded  to  the  United  States,  by  the  late  Compromise  Law, 
67,000,000  acres— leaving  Texas  175,594,560  acres.  The  whole  amount 
of  claims  originating  under  the  late  Republic  and  State  of  Texas  is 
48,265,663  acres.  Making  the  total  amount  of  every  description  of  claims 
against  the  public  domain  63,783,054  acres.  There  will,  consequently, 
remain  to  Texas,  after  every  legal  claim  for  land  officially  known  to  exist 
against  her  shall  have  been  satisfied,  111,812,079  acres;  this  land,  esti 
mated  at  only  fifty  cents  per  acre,  would  be  $55,906,039. 

"  Lauds  patented  for  educational  purposes : — 

"For  two  State  universities    ....     199,102  acres. 
"    denominational  colleges          .         .         .       31,106     " 
"    schools  in  each  county    ....     175,945     " 

"Total 406,153  acres. 

"  This  includes  only  the  lands  surveyed  and  patented.  There  are  some 
300,000  acres  more  already  ordered  by  law  to  be  surveyed  for  the  primary 
or  common  school  purposes." — Marshall  Patriot. 

There  are  great  discrepancies  in  the  accounts  of  the  superficial  contents 
of  Texas,  both  before  and  since  the  reduction  of  her  limits. 


282  APPENDIX. 

% 

L. 

REVENUE  LAWS  OF  TEXAS. 

Acts  of  Texas  relating  to  Duties  on  Imports  and  Tonnage. 

December  12,  1835.  Ordinance  imposing  twenty  per  cent,  duties  on  such 
imports  as  are  entitled  to  debenture  in  the  ports  whence  shipped,  and  ten 
per  cent,  on  other  imports. 

December  15, 1835.  A  tonnage  duty  of  $1  25  a  ton  imposed,  and  a  duty 
of  twelve  and  a  half  cents  a  gallon  on  whiskey,  American  gin,  rum,  and 
brandy. 

December  27,  1835.  The  duties  on  imports  increased;  those  at  ten  to 
fifteen  per  cent.,  and  those  at  twenty  to  twenty-five  per  cent. 

[The  above  were  by  the  Provisional  Government.] 

December  30,  1836.  Act  passed  imposing  duties  at  various  rates,  from 
one  per  cent,  to  fifty ;  and  a  tonnage  duty  of  twenty-five  cents  a  ton. 

June  12,  1837.  An  act  establishing  ports  of  entry,  and  imposing  duties 
on  imports,  at  various  rates,  ad  valorem  and  specific. 

December  18,  1837.  An  act  to  admit  sugar,  coffee,  tea,  salt,  iron,  and 
sundry  other  articles,  free  of  duty. 

May  9,  1838.  An  act  prohibiting  giving  bonds  for  duties,  and  requiring 
said  goods  to  be  held  till  the  duties  should  be  paid.  The  goods  to  be  sold 
if  the  duties  were  not  paid  within  ten  days. 

January  15,  1839.  An  act  passed  allowing  bonds  to  be  given  for  the 
payment  of  duties. 

February  5,  1840.  An  act  altering  the  several  acts  to  raise  a  public 
revenue  by  import  duties.  This  act  extends  through  nineteen  sections. 

January  4,  1841.  An  act  for  the  regulation  of  the  coasting  trade,  and 
the  protection  of  Texan  shipping.  Eight  sections. 

February  5,  1841.  An  act  doubling  the  specific  duties  on  imports,  and 
increasing  the  ten  and  fifteen  per  cent,  ad  valorem  duties  to  forty-five  per 
cent.  Sugar,  coffee,  salt,  iron,  and  steel  were  exempted  from  the  operation 
of  this  act,  and  allowed  to  be  imported  at  the  old  rates. 

January  24,  1842.  A  supplement  passed  to  the  customs  act.  It  ex 
tended  through  twenty-four  sections,  and  imposed  duties  on  articles  before 
exempt :  on  flour  one  dollar  a  barrel ;  on  salt  ten  cents  a  bushel ;  on  powder, 
lead,  and  firearms  of  every  description,  fifteen  per  cent,  ad  valorem.  No 
thing  was  left  free  of  import  duty  but  live  stock,  Bibles,  Testaments,  and 
primary  school-books. 


APPENDIX.  283 

Acts  of  Texas  relatiny  to  Internal  Taxes. 

December  21,  1836.  The  sheriffs  made  collectors  of  taxes  in  their  re 
spective  counties. 

June  12,  1837.  An  act  passed  imposing  a  tax  of  one  and  a  half  per 
cent,  ad  valorem  on  all  property,  real,  personal,  and  mixed;  on  each  whole 
sale  and  retail  dealer  fifty  dollars  per  annum ;  on  each  retailer  of  liquors 
one  hundred  dollars ;  on  each  billiard-table  two  hundred  dollars ;  on  each 
nine-pin  alley  one  hundred  and  fifty  dollars ;  on  each  tavern  in  a  town  one 
hundred  dollars ;  on  horses  and  cattle,  the  property  of  citizens  of  the  United 
States,  one  dollar  a  head ;  on  each  white  male,  from  twenty-one  to  fifty 
years  of  age,  one  dollar  a  year;  on  each  peddler  fifty  dollars  for  each  county. 

May  24,  1838.  An  act  providing  that  hereafter  direct  taxes  should  be 
levied  only  on  lands  and  slaves ;  horses,  over  two ;  mules,  over  two ;  neat 
cattle,  over  twenty-five  in  number ;  clocks,  watches,  pleasure-carriages,  town 
and  city  lots,  taverns,  grogshops,  billiard-tables,  nine-pin  alleys,  merchants, 
and  polls. 

January  26,  1839.  An  act  passed  requiring  inventories  to  be  made  out 
and  sworn  to  of  all  taxable  property,  and  imposing  a  double  tax  on  all  lands 
held  by  agents  and  representatives ;  also  imposing  a  tax  of  from  one  to  five 
dollars  on  land-certificates. 

January  14,  1840.  An  act  passed  to  raise  a  revenue  by  direct  taxation. 
This  act  extends  through  forty  sections. 

January  14,  1841.  An  act  to  provide  for  the  better  collection  of  moneys 
due  from  delinquent  agents  and  officers  of  the  government.  Punishment, 
fine  and  imprisonment. 

February  5, 1841.  An  act  to  amend  "  an  act  to  raise  a  revenue  by  direct 
taxation."  Nine  sections. 

January  28,  1842.  An  act  prolonging  to  May,  1842,  the  period  for  the 
payment  of  taxes  for  1841,  and  abolishing  the  penalty  of  double  taxes  for 
non-payment  of  the  taxes  of  1841. 

February  5, 1842.  An  act  to  amend  "an  act  to  raise  a  revenue  by  direct 
taxation." 

January  16,  1843.  An  act  for  the  more  certain  collection  of  the  license- 
tax. 

May  13,  1846.  An  act  to  provide  for  the  assessment  and  collection  of 
taxes. 

March  20,  1848.  An  act  to  provide  for  the  more  certain  collection  of 
taxes  for  the  years  1846  and  1847. 

February  11,  1850.  An  act  passed  reducing  the  taxes  on  property  one- 
fourth,  and  the  poll-tax  one-half. 


284  APPENDIX. 


M. 

TENDERS  FOR  PUBLIC  DUES  IN  TEXAS. 

December  30,  1835.  Audited  drafts  made  receivable  for  land  dues. 

January  10,  1836.  McKinney  and  Williams  authorized  to  raise 
$100,000  by  loan  for  the  use  of  the  government,  and  the  bonds  for  the 
same  made  receivable,  six  months  after  date,  for  all  public  dues. 

January  12,  1836.  Authority  given  to  issue  treasury  notes  to  the  amount 
of  $150,000,  and  the  same  made  receivable  for  all  public  dues. 

None  of  these  bonds  or  treasury  notes  were  issued ;  but  we  note  the  acts 
as  indicative  of  the  principles  on  which  the  Government  of  Texas  com 
menced  operations. 

October  4,  1836.  The  notes  of  any  bank  making  loans  to  the  Republic 
made  receivable  to  the  amount  of  said  loans,  for  all  public  dues,  so  long  as 
the  bank  should  continue  specie  payments. 

December  24,  1836.  Audited  drafts  made  receivable  for  duties  on 
imports. 

January  7,  1837.  Land-script  no  longer  received  in  payment  of  public 
dues.  Up  to  this  date,  it  appears  to  have  been  received  without  direct 
authority  of  law. 

January  12, 1837.  The  islands  ordered  to  be  sold  for  specie,  or  the  notes 
of  current  specie-paying  banks. 

June  9,  1837.  The  issue  of  treasury  notes  authorized,  and  declaration 
made  that  they  should  be  considered  as  cash  and  received  as  cash  for  all 
dues  to  government. 

June  12,  1837.  It  is  enacted  "  that-all  duties  or  public  dues,  of  what 
ever  nature  or  description,  shall  be  collected  or  paid  in  gold,  silver,  or  such 
current  bank  paper  as  the  authorities  may  from  time  to  time  direct." 

June  12,  1837.  It  is  enacted,  in  another  bill,  that  properly  audited 
drafts  should  be  received  in  payment  of  all  direct  and  license-taxes,  except 
those  imposed  on  retailers  of  liquors,  billiard-tables,  nine-pin  alleys,  and 
games  of  that  kind. 

December  14,  1837.  Nothing  but  gold,  silver,  and  treasury  notes  re 
ceivable  for  customs ;  and  no  bank-note  to  be  received  in  payment  of  any 
due  to  government. 

May  6,  1838.  A  loan  of  five  millions  authorized,  the  bonds  to  be  sold 
for  the  notes  of  any  bank  whose  paper  shall  be  at  par  with  the  best  bank 
paper  in  the  cities  of  New  York  or  Philadelphia.  N.  B.  At  this  time,  the 
banks  of  Philadelphia  had  not  resumed  specie  payments. 


APPENDIX.  285 

May  9,  1838.  The  prohibition  against  the  receipt  of  bank-notes  for 
customs  renewed. 

January  15,  1839.  The  standard  value  for  gold  and  silver  coin  declared 
to  be  the  same  as  in  the  United  States. 

February  5,  1840.  Eight  per  cent,  treasury  bonds  made  receivable  for 
all  dues  to  the  government. 

June  16,  1840.  The  receipts  of  audited  drafts  restricted  to  cases  in 
which  the  public  debtor  should  present  to  the  collector  the  amount  due  and 
no  more,  if  so  required  by  the  collector. 

February  5,  1841.  The  public  liabilities  made  receivable  in  exchange  for 
land-script  at  two  dollars  an  acre. 

January  14,  1842.  The  auditor  required  to  audit  all  outstanding  just 
claims  against  the  government,  and  said  audited  paper  made  receivable  for 
all  government  dues  which  have  heretofore  accrued,  till  further  ordered. 

June  19,  1842.  From  and  after  February  1,  only  gold  and  silver  and 
exchequer  bills  receivable  for  imposts  and  direct  and  license-taxes.  Land 
dues  (the  land-tax  excepted)  still  payable  in  public  liabilities ;  but  the 
receipt  of  treasury  notes  no  longer  allowed  in  payment  of  taxes  to  be  here 
after  assessed. 

January  28,  1842.  Those  in  arrears  for  taxes  allowed  to  pay  them  as 
heretofore  in  the  promissory  notes  or  other  liabilities  of  government,  or 
one-sixth  of  the  amount  in  gold,  silver,  or  exchequer  bills. 

February  1,  1842.  All  postages  to  be  received  in  gold,  silver,  or  exche 
quer  bills. 

June  27,  1842.  The  collectors  of  customs,  direct  and  license-taxes,  and 
postages,  required  to  receive  exchequer  bills  at  only  the  current  rates  at 
which  said  bills  are  selling  in  the  market. 

January  17,  1844.  Fines  and  forfeitures  payable  only  in  gold,  silver,  or 
exchequer  bills,  and  all  bonds,  obligations,  or  recognizances  to  the  Repub 
lic,  made  payable  in  gold  or  silver  only. 

February  5,  1844.  Auditors'  certificates  for  carrying  the  mail  made 
receivable  in  payment  of  direct  taxes.  And  "  Bryan  drafts,"  to  the  amount 
of  $2,133  62,  authorized  to  bear  five  per  cent,  interest  per  annum,  and  to 
be  receivable  for  taxes  and  customs. 

Other  special  drafts  of  this  kind  were  authorized  under  different  names. 

February  3,  1845.  The  further  issue  and  reissue  of  exchequer  bills  pro 
hibited,  and  provision  made  that,  from  and  after  the  receipt  of  such  public 
paper  as  was  then  receivable  by  laws,  all  dues  to  government  should  be 
paid  in  gold  and  silver  only,  except  land  dues,  which  might  be  paid,  as 
heretofore,  in  audited  drafts,  treasury  notes,  or  other  liabilities  of  govern 
ment. 

February  3,  1845.  County  taxes  hereafter  levied  made  payable  in  gold 


286 


APPENDIX. 


or  silver  only,  or  such  liabilities  of  the  respective  counties  as  the  County 
Commissioners'  Court  may  direct. 

May  13, 1846.  All  coins  made  current  by  the  laws  of  the  United  States, 
and  the  exchequer  bills  of  the  Republic  of  Texas,  declared  to  be  receivable 
in  payment  of  all  taxes  and  revenues.  The  same  re-enacted  March  20th, 
1848. 

March  2,  1848.  Government  liabilities,  when  in  the  hands  of  original 
holders,  made  receivable  at  par  rates  (i.  e.  scaled  rates),  as  "set-offs" 
against  the  claims  which  government  may  have  on  such  holders  of  its  lia 
bilities. 

January  23,  1850.  Arrears  of  taxes  due  the  late  Republic,  if  originally 
collectible  in  government  liabilities,  made  payable  in  the  same,  or  one-fifth 
of  the  amount  in  gold  and  silver ;  if  originally  collectible  in  exchequer 
bills,  to  be  paid  in  said  bills  or  in  gold  and  silver,  or  else  in  government 
liabilities  at  the  rate  of  five  dollars  in  such  liabilities  for  one  dollar  in  ex 
chequer  bills. 

February  11,  1850.  All  coins  made  current  by  the  laws  of  the  United 
States  to  be  received  at  the  rates  thereby  established. 

February  11, 1850.  Certificates  of  audited  claims  made  receivable  in  ex 
change  for  land-script,  at  the  rate  of  fifty  cents  an  acre. 


N. 


REVENUE  AND  EXPENDITURES  OF  THE  STATE  OP  TEXAS. 


RECEIPTS. 

Year  ending 

Year  ending 

Two  years,  ending 

October  31,  1848. 

October  31,  1849. 

October  31,  1851. 

Direct  and  license-taxes   . 

.    $91,905  28 

$93,670  38 

$200,347  29* 

Sales  of  Austin  city  lots   . 

2,498  00 

1,632  20 

12,224  73f 

Rents  of  public  buildings 

671  73 

712  96 

Sales  of  custom-houses 

389  75 

942  00 

6,068  00 

Fees  of  office 

377  29 

991  15 

3,667  42 

Fines  and  forfeitures    .     . 

102  22 

611  34 

923  59 

Miscellaneous      .... 

189  45 

2,249  93J 

Total 


$96,133  72          $98,560  03 


$225,480  96 


*  Including  land  dues  and  land  patents,  $4,014  14. 

j-  Including  rent  of  public  building. 

J  Including  property  redeemed  for  taxes,  $1,656  66. 


APPENDIX.  287 

Besides  the  above,  the  State  appears  to  have  received,  between  the  20th 
of  February,  1844,  and  the  31st  of  October,  1847,  the  sum  of  $50,157  85 
for  direct  taxes  and  licenses.  This  makes  the  aggregate  revenue,  from  the 
foundation  of  the  State  government,  February  20th,  1846,  to  the  31st  of 
October,  1851,  $470,332  56.  The  average  is  $83,000  a  year.  This  is 
exclusive  of  county  and  private  trust  funds. 

In  addition  to  the  above,  the  State  has  received — 

From  the  Treasurer  of  the  late  Republic,  in  specie $19,297  51 

From  arrears  of  revenue  of  late  Republic,  Feb.  1846,  to  Oct.  1849     125,292  36 

Oct.  1849,  to  Oct.  1851        3,821  01 


$148,410  88 

Making,  with  the  revenue  of  the  State,  a  total  of  means,  from  February 
20,  1846,  to  October  31,  1851,  of  $618,743  44.  Average  per  annum, 
$109,190. 


EXPENDITURES. 


On  treasury  warrants  of  late  Republic  outstanding  Feb.  20,  1846     $15,724  29 
For  appropriations  by  State  Legislature  for  payment  of  debts  in 
curred  by  late  Republic 17,998  09 


Total  on  account  of  late  Republic $33,722  38 

On  account  of  the  State,  from  February  20,  1846,  to  October  31, 

1849,  three  years  and  eight  months 292,349  31 

On  account  of  the  State,  from  October  31,  1849,  to  October  31, 

1851,  two  years 263,427  89 


$589,499  58 

In  the  above,  expenditures  for  county  and  trust  funds  to  the  amount  of 
$3,989  65  are  included,  leaving  for  the  expenditures  of  the  State,  from 
February  20,  1846,  to  October  31,  1851,  five  years  and  eight  months,  the 
sum  of  $551,787  55.  This  is  at  the  rate  of  $97,374  a  year,  independently 
of  appropriations  to  the  general  school  fund. 

Besides  the  receipts  and  expenditures  here  given,  others  have  been  made 
on  account  of  county  and  private  trust  funds. 

We  have  no  account  in  detail  of  the  expenditures  for  1846  to  1851;  but 
their  character  may  be  judged  of  from  the  following  estimate,  by  the  comp 
troller,  of  the  expenses  of  the  State  for  the  year  ending  October  31, 1852 : — 

Legislative  department $49,116  00 

Executive  "  28,000  00 

Judicial  "  33,500  00 

Miscellaneous  expenses         16,200  00 

Total    ...  .  $126,816  00 


288  APPENDIX. 

The  amount  of  specie  on  hand  October  31,  1851,  was — 

General  fund        $25,890  68 

School  fund 12,051  81 

County  and  private  trust  funds        9,398  84 


$47,341  33 

The  fiscal  concerns  of  Texas  are,  so  far  as  regards  receipts  and  payments, 
now  well  managed.  Its  sub-treasury  system  is  more  complete  than  that  of 
the  United  States,  for  its  payments,  as  well  as  its  receipts,  are  in  gold  and 
silver. 

The  whole  amount  of  its  receipts  and  payments  is,  indeed,  but  small; 
but  when  it  is  considered  that,  according  to  the  report  of  £he  Commissioner 
of  the  Texan  Land-Office,  the  area  of  the  State,  within  its  reduced  limits, 
is  274,366  square  miles,  it  will  be  obvious  that  much  good  management 
must  be  requisite  to  effect  receipts  and  payments  in  points  both  numerous 
and  remote. 

One  of  the  features  of  a  good  treasury  system,  as  well  as  of  a  good  com 
mercial  system,  is  the  prevention  of  the  unnecessary  carriage  of  gold  and 
silver  from  point  to  point.  This  is  effected  by  the  judicious  use  of  bills  of 
exchange ;  and  hence  sound  bills  of  exchange  are  as  necessary  as  sound 
money  for  the  perfection  of  a  treasury  system.  Government  drafts  are 
sound  public  bills  of  exchange  when  they  are  drawn  against  gold  or  silver 
actually  in  some  depository,  or  in  the  hands  of  some  public  officer.  There 
being  in  the  laws  of  Texas  none  of  those  absurd  restrictions  on  the  use  of 
government  drafts  that  are  found  in  the  sub-treasury  law  of  the  United 
States,  the  officers  of  the  Texan  Treasury  Department  make  free  use  of  them 
to  prevent  the  unnecessary  carriage  of  gold  and  silver  from  point  to  point. 

The  area  of  Texas  being  greater  than  that  of  all  our  Atlantic  States  from 
the  northern  limits  of  Pennsylvania  and  New  Jersey  to  the  southern  limits 
of  Georgia,  there  would  be  immense  expense  in  bringing  all  the  receipts  of 
the  State  to  Austin,  and  sending  them  to  the  points  where  they  are  to  be 
disbursed.  This  is  avoided  by  giving  to  the  public  creditors  drafts  on  the 
public  officers  who  collect  the  funds. 

In  this  way,  the  State  not  only  collects  and  disburses  its  own  funds,  but 
collects  part  of  the  funds  due  to  the  counties.  A  man  residing  in  Browns 
ville,  on  the  confines  of  Mexico,  may  own  lands  in  various  counties,  some 
near  Arkansas,  and  some  near  Louisiana;  provision  is  made  that  he  may 
pay  to  the  treasurer  of  the  county  in  which  he  resides  his  county  taxes  on 
all  his  lands  in  all  parts  of  the  State.  Due  report  of  this  is  made  at 
Austin,  and  the  officers  of  the  Treasury  Department  there,  by  means  of 
government  drafts,  transfer  to  each  county  the  balance  that  is  due  to  it. 

These  government  drafts,  being  for  uncertain  amounts  of  dollars  and 
cents,  do  not  become  a  common  circulating  medium,  and  hence  do  not 


APPENDIX. 


289 


drive  gold  and  silver  out  of  circulation.  All  they  do  is  to  prevent  the 
unnecessary  carriage  of  gold  and  silver  from  place  to  place.  And  in  this 
way  they  do  much  good  and  no  evil. 


0. 


ASSESSMENTS   IN   TEXAS. 


LAND. 

TOWN 

LOTS. 

Acres.                   Value. 

No. 

Value. 

1848 

38,788,439      $24,612,155 

31,525 

$3,142,900 

1849* 

40,599,954        23,632,440 

24,316 

3,121,430 

1850f 

32,297,199        21,539,810 

25,171 

3,272,560 

1851J 

31,398,609         23,591,230 

18,697 

3,615,980 

NEGROES. 

HORSES. 

No.                     Value. 

No. 

Value. 

1848 

40,610           13,398,490 

62,384 

2,056,575 

1849* 

38,207           12,773,540 

53,470 

2,073,395 

1850f 

48,297          17,492,500 

68,507 

2,530,375 

1851J 

51,064          20,492,250 

71,798 

2,878,930 

CATTLE. 

MONEY-LENDERS. 

No.                     Value. 

No. 

Amount  lent. 

1848 

518,867          2,117,900 

179 

101,485 

1849* 

523,676          2,064,440 

255 

120,315 

1850f 

676,545          2,621,895 

350 

209,415 

1851J 

709,396          2,980,485 

482 

324,675 

STORES.              MISCELLANEOUS  PROPERTY. 

Total  value  of 

No.               Value. 

Value.                       property  assessed. 

1848 

403         1,055,065 

1,162,730, 

47,647,300 

1849* 

480         1,092,755 

1,221,625 

46,099,940 

1850f 

581         1,651,340 

1,396,720 

50,714,615 

1851J 

532         1,709,970 

1,479,195 

57,072,715 

Total  of  poll 

Average  value 

Ad  valorem  tax.§          Total  poll-tax. 

and  ad  valorem  tax 

of  land  per  acre. 

1848 

$95,294  60          $21,429  00 

$116,723  60 

63  cts. 

1849* 

92,199  88            21,288  00 

123,487  60fl 

58  " 

1850f 

76,071  91            11,520  50 

89,242  41fl 

66  « 

1851J 

85,609  07            12,040  00 

116,652  07f 

75  " 

It  will  be  seen  that  the  value  of  taxable  property  increases,  though,  for 
some  unexplained  reason,  the  number  of  acres  of  land  returned  for  assess 
ment  decreases. 

*  No  returns  from  five  counties.  f  No  returns  from  two  counties. 

J  No  returns  from  eight  counties. 

g  In  1848  and  1849,  this  tax  was  20  cents— in  1850  and  1*851, 15  cents— in  $100. 

||  In  1848  and  1849,  $1  00— in  1850  and  1851,  50  cents— a  head. 

If  Including  estimates  for  the  counties  from  which  returns  had  not  been  received. 

19 


290 


APPENDIX. 


The  following  particulars  of  the  assessment  of  1845  are  given,  as  that 
was  the  year  in  which  Texas  was  admitted  into  the  Union. 

Land  21,885,990  acres  Value  $15,830,120 

Town  lots,  number  18,322  «          1,589,874 

Sales  of  merchandise 54,484 

Money  at  interest 9,417 


Negroes .... 
Pleasure-carriages 
Gold  watches  .  . 
Silver  watches 
Metal  clocks  .  . 
Wood  " 


23,262 

Saddle  horses 

218 

Stud          " 

508 

Work 

451 

Race          " 

.  337 

Cattle      .     . 

593 

800 

130 

12,041 

22 
284,336 


DIRECT  TAXES. 

Specific       ...........  $21,525  48 

Ad  valorem      ..........  20,372  17 

Poll  .............  5,365  00 


$47,262  65 
The  stores  are  valued  at  the  amount  of  merchandise  contained  in  them 

on  the  1st  of  January. 

"  Under  no  system  has  the  entire  landed  interest  of  the  State  been  taxed." 

(Comptroller's  Keport,  Dec.  3,  1849.) 


LICENSE-TAXES. 

1847.  1848. 
Amount  of  tax  on 

Merchandise     ....     $11,863  01  $7,004  29 

Spirits  by  wholesale  .     .         3,749  47  2,330  05 

"  retail    .     .     .         8,109  17  8,279  57 

Peddlers 801  91  489  17 

Doctors  and  lawyers  .     .         1,393  08  304  18 

Boarding-houses    ...              45  23  11  25 

Taverns        719  34  267  55 

Billiard-tables  ....            553  32  770  81 

Auctioneers       ....            148  13  26  24 

Restaurants      ....              68  86  98  90 

Ten-pin  alleys       ...            125  29  113  21 

Brokers 98  95  228  98 

Race-course       ....  7  66 

Theatre 25  00  33  25 

Exhibitions 38  32 

Commission  merchants    . 

Professions 

Estimate  for  counties  from 

which  no  returns  were  rec'd  1,048  60 


1849. 


$6,367  73 
5    }  8,804  04 


349  32 


20  00 

1,229  05 

329  14 

162  00 

229  26 

25  00 

91  65 

249  98 

15  00 


1850. 

$6,326  64 

6,774  90 

202  42 


1,174  11 
183  33 
183  35 
173  32 


1  85 
208  32 


1,000  00 


$27,739  08    $21,013  71    $17,872  17    $16,228  24 
Note. — Many  of  the  returns  for  1850  were  for  nine  months  only. 


APPENDIX. 


291 


Direct  tax,  ad  valorem 

"         «    poll 
Licenses  . 


RECAPITULATION. 

1848.  1849. 

95,294  60  92,199  88 
21,429  00  21,288  00 
21,013  51  17,872  17 


1850. 

76,071  91 
11,520  50 
16,228  24 


Total 137,737  11  131,360  05  103,820  65 

The  decrease  in  the  license-tax  is  accounted  for,  in  part,  "  by  the  change 
made,  at  the  last  session  of  the  Legislature,  of  the  tax  on  merchants,  from 
a  specific  tax  on  that  calling,  to  an  ad  valorem  tax  of  one-fifth  of  one  per 
cent,  on  the  amount  of  purchases."  (Comptroller's  Report,  Dec.  29, 1849.) 


P. 


AGRICULTURAL  STATISTICS  OF  FORTY-ONE  COUNTIES  IN  1848. 


Cotton  in  seed 

Sugar  .... 

Molasses 

Corn     .... 

Wheat 

Eye,  oats,  &c. 

Potatoes 

Tobacco 

Horses  and  mules 

Cattle  .      '  .        !        . 

Sheep   .... 

Hogs     .... 

Butter 

Cheese 

Wool     .... 

Total  of  agricultural  products 
Total  of  manufactures 


Land  in  cultivation 

Average  value  of  land  in  cultivation  $8  50  an  acre.  This  table  has  been 
abridged  from  the  report  of  the  comptroller,  of  December  3,  1849.  The 
whole  number  of  counties  in  the  State,  in  1848,  was  seventy-eight,  having 
in  them  38,788,439  acres  on  which  taxes  had  been  assessed.  The  number 
of  acres  on  which  taxes  had  been  assessed,  in  the  forty-one  counties  from 
which  the  above  returns  were  received,  was  23,921,357.  Supposing  the 


Quantity. 

Value. 

85,636,513  pounds, 

$1,356,617 

5,816,908      do. 

195,934 

176,446  gallons, 

36,850 

3,491,227  bushels, 

1,512,731 

33,039       « 

29,052 

150,515 

75,650 

742,003 

296,589 

92,527  pounds, 

7,993 

38,182  number, 

1,356,79 

369,901 

1,895,790 

39,950 

61,202 

223,358 

315,855 

774,083  pounds, 

89,384 

58,603 

8,685 

48,856 

16,586 

icts        .         .       V  "' 

7,255,712 

-  "'  r 

133,436 

1  manufactures 

$7,389,148 

316,153  acres, 

$2,684,183 

292  APPENDIX. 

number  of  acres  in  cultivation,  and  the  products,  to  bear  the  same  propor 
tion  to  the  acres  taxed  in  the  thirty-seven  remaining  counties,  then  the 
whole  number  of  acres  in  cultivation  in  Texas,  in  1848,  was  512,641,  and 
the  total  value  thereof  $4,307  449.  On  the  same  principle  of  calculation, 
the  total  value  of  agricultural  products  was  $11,765,012,  and  of  manu 
factures  $216,362.  Aggregate,  $11,981,374. 

It  is  evident  that  all  those  important  branches  of  industry  which  are  con 
nected  with  house  building  are  not  embraced  in  these  returns;  and  the  pro 
bability  is  that  the  products  of  many  kinds  of  handicraft  are  entirely 
omitted.  From  only  thirteen  counties  in  forty-one  were  any  returns  of 
manufactures  obtained. 


Q. 

ACT  OF  ANNEXATION. 

In  Convention  of  the  people  of  the  Kepublic  of  Texas,  July  4,  1845. 

AN  ORDINANCE. 

WHEREAS,  The  Congress  of  the  United  States  of  America  has  passed 
resolutions  providing  for  the  annexation  of  Texas  to  that  Union,  which 
resolutions  were  approved  by  the  President  of  the  United  States  on  the  first 
day  of  March,  one  thousand  eight  hundred  and  forty-five ;  and  whereas, 
the  President  of  the  United  States  has  submitted  to  Texas  the  first  and 
second  sections  of  the  said  resolution,  as  the  basis  upon  which  Texas  may 
be  admitted  as  one  of  the  States  of  the  said  Union ;  and  whereas,  the  ex 
isting  Government  of  the  Republic  of  Texas  has  assented  to  the  proposals 
thus  made,  the  terms  and  conditions  of  which  are  as  follows  : — 

JOINT  RESOLUTION  FOR  ANNEXING  TEXAS  TO  THE  UNITED  STATES. 

Resolved,  by  the  Senate  and  House  of  Representatives  of  ilie  United  /States 
of  America  in  Congress  assembled,  That  Congress  doth  consent  that  the 
territory,  properly  included  within,  and  rightfully  belonging  to  the  Repub 
lic  of  Texas,  may  be  erected  into  a  new  State,  to  be  called  the  "  State  of 
Texas,"  with  a  republican  form  of  government,  to  be  adopted  by  the  people 
of  said  Republic,  by  deputies  in  convention  assembled,  with  the  consent  of 
the  existing  government,  in  order  that  the  same  may  be  admitted  as  one  of 
the  States  of  this  Union. 

2.  And  be  it  further  resolved,  That  the  foregoing  consent  of  Congress  is 


APPENDIX.  293 

given  upon  the  following  conditions,  and  with  the  following  guarantees,  to 
wit:  First.  Said  State  to  be  formed,  subject  to  the  adjustment,  by  this 
government,  of  all  questions  of  boundary  that  may  arise  with  other  govern 
ments;  and  the  Constitution  thereof,  with  the  proper  evidence  of  its  adop 
tion  by  the  people  of  said  Republic  of  Texas,  shall  be  transmitted  to  the  Pre 
sident  of  the  United  States,  to  be  laid  before  Congress  for  its  final  action,  on 
or  before  the  first  day  of  January,  one  thousand  eight  hundred  and  forty-six. 
Second.  Said  State,  when  admitted  into  the  Union,  after  ceding  to  the  United 
States  all  public  edifices,  fortifications,  barracks,  ports  and  harbors,  navy  and 
navy  yards,  docks,  magazines,  arms  and  armaments,  and  all  other  property 
and  means  pertaining  to  the  public  defence  belonging  to  the  said  Republic 
of  Texas,  shall  retain  all  the  public  funds,  debts,  taxes,  and  dues  of  every 
kind,  which  may  belong  to,  or  be  due  and  owing  to  the  said  Republic ;  and 
shall  also  retain  all  the  vacant  and  unappropriated  lands  lying  within  its 
limits,  to  be  applied  to  the  payment  of  the  debts  and  liabilities  of  said  Re 
public  of  Texas;  and  the  residue  of  said* lands,  after  discharging  said  debts 
and  liabilities,  to  be  disposed  of  as  said  State  may  direct;  but  in  no  event 
are  said  debts  and  liabilities  to  become  a  charge  upon  the  Government  of 
the  United  States.  Third.  New  States  of  convenient  size,  not  exceeding 
four  in  number,  in  addition  to  said  State  of  Texas,  and  having  sufficient 
population,  may  hereafter,  by  the  consent  of  said  State,  be  formed  out  of 
the  territory  thereof,  which  shall  be  entitled  to  admission  under  the  provi 
sions  of  the  Federal  Constitution.  And  such  States  as  may  be  formed  out 
of  that  portion  of  said  territory  lying  south  of  thirty-six  degrees  thirteen 
minutes  north  latitude,  commonly  known  as  the  "  Missouri  Compromise 
Line,"  shall  be  admitted  into  the  Union,  with  or  without  slavery,  as  the 
people  of  each  State  asking  admission  may  desire.  And  in  such  State,  or 
States,  as  shall  be  formed  out  of  said  territory,  north  of  said  "  Missouri  Com 
promise  Line/'  slavery  or  involuntary  servitude  (except  for  crime)  shall  be 
prohibited. 

Now,  in  order  to  manifest  the  assent  of  the  people  of  this  Republic,  as 
required  in  the  above-recited  portions  of  the  said  resolutions,  we,  the  depu 
ties  of  the  people  of  Texas,  in  convention  assembled,  in  their  name,  and  by 
their  authority,  do  ordain  and  declare  that  we  assent  to,  and  accept  the 
proposals,  conditions,  and  guarantees  contained  in  the  first  and  second 
sections  of  the  resolution  of  the  Congress  of  the  United  States  aforesaid. 

Done  at  the  City  of  Austin,  Republic  of  Texas,  July  4,  1845. 


294  APPENDIX. 

R. 

THE  BOUNDARY  ACT. 

•     ,    %     ^ 

An  act  proposing  to  the  State  of  Texas  the  establishment  of  her  northern 
and  western  boundaries,  the  relinquishment  by  the  said  State  of  all  territory 
claimed  by  her  exterior  to  said  boundaries,  and  of  all  her  claims  upon  the 
United  States. 

Be  it  enacted,  <frc.,  That  the  following  propositions  shall  be  and  the  same 
are  hereby  offered  to  the  State  of  Texas,  which,  when  agreed  to  by  the  said 
State,  in  an  act  passed  by  the  General  Assembly,  shall  be  binding  and  ob 
ligatory  upon  the  United  States  and  upon  the  said  State  of  Texas  :  Provided, 
That  the  said  agreement  by  the  said  General  Assembly  shall  be  given  on 
or  before  the  1st  day  of  December^  1850. 

First.  The  State  of  Texas  will  agree  that  her  boundary  on  the  north  shall 
commence  at  the  point  at  which  the  meridian  of  one  hundred  degrees  west 
from  Greenwich  is  intersected  by  the  parallel  of  thirty-six  degrees  and  thirty 
minutes  north  latitude,  and  shall  run  from  said  point  due  west  to  the  meri 
dian  of  one  hundred  and  three  degrees  west  from  Greenwich;  thence  her 
boundary  shall  run  due  south  to  the  thirty-second  degree  of  north  latitude ; 
thence  on  the  said  parallel  of  thirty-two  degrees  of  north  latitude  to  the  Rio 
Bravo  del  Norte;  and  thence,  with  the  channel  of  said  river,  to  the  Gulf  of 
Mexico. 

Second.  The  State  of  Texas  cedes  to  the  United  States  all  her  claim  to 
territory  exterior  to  the  limits  and  boundaries  which  she  agrees  to  establish 
by  the  first  article  of  this  agreement. 

Third.  The  State  of  Texas  relinquishes  all  claim  upon  the  United  States 
for  liability  for  the  debts  of  Texas,  and  for  compensation  or  indemnity  for 
the  surrender  to  the  United  States  of  her  ships,  forts,  arsenals,  custom 
houses,  custom-house  revenue,  arms  and  munitions  of  war,  and  public 
buildings,  with  their  sites,  which  became  the  property  of  the  United  States 
at  the  time  of  annexation. 

Fourth.  The  United  States,  in  consideration  of  said  establishment  of 
boundaries,  cession  of  claim  to  territory,  and  relinquishment  of  claims,  will 
pay  to  the  State  of  Texas  the  sum  of  ten  millions  of  dollars,  in  a  stock 
bearing  five  per  cent,  interest,  and  redeemable  at  the  end  of  fourteen  years, 
the  interest  payable  half  yearly  at  the  Treasury  of  the  United  States. 

Fifth.  Immediately  after  the  President  of  the  United  States  shall  have 
been  furnished  with  an  authentic  copy  of  the  act  of  the  General  Assembly 
of  Texas  accepting  these  propositions,  he  shall  cause  the  stock  to  be  issued 


APPENDIX.  295 

in  favor  of  the  State  of  Texas,  as  provided  for  in  the  fourth  article  of  agree 
ment  :  Provided,  That  not  more  than  five  millions  of  said  stock  shall  be  issued 
until  the  creditors  of  the  State,  holding  bonds  and  other  certificates  of  stock 
of  Texas,  for  which  duties  on  imports  were  specially  pledged,  shall  first  file 
at  the  Treasury  of  the  United  States  releases  of  all  claim  against  the  United 
States  for  or  on  account  of  said  bonds  or  certificates,  in  such  form  as  shall 
be  prescribed  by  the  Secretary  of  the  Treasury,  and  approved  by  the  Pre 
sident  of  the  United  States :  Provided,  also,  That  nothing  herein  contained 
shall  be  construed  to  impair  or  qualify  anything  contained  in  the  third 
article  of  the  second  section  of  the  joint  resolution  for  annexing  Texas  to 
the  United  States,  approved  March  1,  1845,  either  as  regards  the  number 
of  States  that  may  hereafter  be  formed  out  of  the  State  of  Texas  or  otherwise. 


s. 

AN  ACT  PROVIDING  FOR  THE  LIQUIDATION  AND  PAYMENT  OF  THE  DEBT 
OF  THE  LATE  REPUBLIC  OF  TEXAS,  JANUARY  31,  1852. 

SEC.  1.  Be  it  enacted  by  the  Legislature  of  the  State  of  Texas,  That  two 
millions  of  dollars  of  bonds  of  the  indemnity  due  the  State  of  Texas,  and 
now  at  her  disposal,  for  the  sale  to  the  United  States  of  a  portion  of  her 
north-western  territory,  under  the  provisions  of  an  act  of  Congress  proposing 
to  the  State  of  Texas  the  establishment  of  her  northern  and  western  bound 
aries,  &c.,  approved  September  9,  1850,  are  hereby  appropriated  for  the 
payment  of  that  portion  of  the  debt  of  the  late  Republic  of  Texas  embraced 
in  articles  third,  fourth,  ninth,  tenth,  fourteenth,  fifteenth,  and  sixteenth, 
and  interest  which  may  have  accrued  thereon  included  in  articles  twelfth 
and  thirteenth  of  this  section;  which  debt  has  been  submitted  for  adjust 
ment  to  the  auditor  and  comptroller  of  the  State,  under  the  provisions  of  an 
act  to  provide  for  ascertaining  the  debt  of  the  late  Republic  of  Texas,  ap 
proved  March  20,  A.  D.  1848,  and  an  act  supplementary  thereto,  approved 
February  8,  A.D.  1850,  and  reported  by  them  to  the  Legislature  in  their 
report  of  November  12,  1851,  as  follows  : — 

First.  For  ten  per  cent,  consolidated  fund,  created  by  act  of  the  7th  of 
June,  1837,  four  hundred  and  forty-two  thousand  seven  hundred  and  sixty- 
eight  dollars  and  seventy-six  cents. 

Second.  For  ten  per  cent,  consolidated  fund  created  by  act  of  the  7th  of 
June,  1837,  issued  under  an  act  for  the  relief  of  Swartwout  and  others, 
seven  thousand  nine  hundred  and  seventy  dollars  and  forty-three  cents. 


296  APPENDIX. 

Third.  For  ten  per  cent,  funded  debt,  created  by  act  of  5th  of  February, 
1840,  two  hundred  and  twenty-six  thousand  and  two  hundred  dollars. 

Fourth.  For  eight  per  cent,  funded  debt,  created  by  act  of  5th  of  Feb 
ruary,  1840,  seven  thousand  two  hundred  and  eighty-four  dollars. 

Fifth.  For  eight  per  cent,  treasury  bonds,  created  by  act  of  5th  of  Feb 
ruary,  1840,  one  hundred  and  fifty-three  thousand  three  hundred  and  sixty 
dollars. 

Sixth.  For  ten  per  cent,  treasury  notes,  issued  under  act  of  June  9th, 
1837,  first  issue,  forty-one  thousand  six  hundred  and  thirty  dollars. 

Seventh.  For  ten  per  cent,  treasury  notes,  issued  under  act  of  June  9, 
1837,  second  issue,  one  hundred  and  sixty-five  thousand  six  hundred  and 
eighty-five  dollars  and  fifty  cents. 

Eighth.  For  treasury  notes  without  interest,  issued  under  act  of  19th 
of  January,  1839,  third  issue,  four  hundred  and  fifty-seven  thousand  and 
forty-eight  dollars. 

Ninth.  For  audited  paper,  issued  under  various  enactments,  sixty-nine 
thousand  four  hundred  and  fifty- one  dollars  and  fifty-two  cents. 

Tenth.  For  miscellaneous  liabilities,  twenty-six  thousand  one  hundred 
and  twenty-nine  dollars  and  eighty-seven  cents. 

Eleventh.  For  ten  per  cent,  bonds,  issued  by  commissioners  to  nego 
tiate  a  loan  for  five  millions  of  dollars,  viz. :  For  loan  obtained  from  Bank 
of  United  States,  four  hundred  thousand  dollars;  for  purchase  of  steamer 
"  Zavalla,"  ninety  thousand  and  fourteen  dollars  and  eighty-four  cents ;  for 
purchase  of  naval  vessels  under  contract  with  F.  Dawson,  now  owned  by 
James  Schott  and  E.  D.  Whitney,  one  hundred  and  forty  thousand  dollars. 

Twelfth.  For  interest  on  the  above  liabilities,  issued  subject  to  interest 
as  stated  in  the  face  of  the  certificates,  one  million  four  hundred  and 
sixty-eight  thousand  one  hundred  and  fifty-five  dollars  and  twenty-six 
cents. 

Thirteenth.  For  additional  interest  to  July  1,  1850,  allowed  by  act  ap 
proved  February  11,  1850,  on  claims  which  had  been  audited  prior  to  its 
passage,  one  hundred  and  thirteen  thousand  six  hundred  and  sixty-four 
dollars  and  eighty  cents. 

Fourteenth.  For  amount  filed  and  receipted  for  as  second  class  debt,  six 
hundred  and  seventy-nine  thousand  two  hundred  and  twenty-two  dollars  and 
fifty  cents. 

Fifteenth.  For  amount  filed  and  receipted  for  as  third  class,  since  recog 
nized  as  second  class,  sixteen  thousand  four  hundred  and  sixty-seven  dollars 
and  ninety-five  cents. 

Sixteenth.  For  amount  audited  by  special  act  of  the  Legislature,  seventy- 
two  thousand  and  seventy-seven  dollars  and  twenty-eight  cents — less  thirty- 


APPENDIX.  297 

eight  thousand  and  fifty-three  dollars  and  seventy-three  cents,  amount  ac 
knowledged  by  joint  resolution,  approved  March  15,  1848. 

SEC.  2.  That  the  disbursements  herein  provided  for  shall  be  made  in 
the  bonds  or  stock  of  indemnity  alluded  to  in  the  first  section  of  this  act,  or 
the  proceeds  thereof,  by  the  Treasurer  of  this  State  upon  the  certificates  of 
indebtedness,  issued  by  the  auditor  and  comptroller  under  the  provisions  of 
the  laws  above  named;  and  in  all  other  respects  the  said  Treasurer  shall 
be  governed  by  the  laws  regulating  the  payment  of  money  out  of  the  State 
treasury  ;  and  the  Comptroller  of  Public  Accounts  for  the  State  of  Texas  is 
hereby  authorized  to  transfer  a  sufficient  amount  of  said  stock,  when  the 
transfer  shall  be  necessary,  by  simple  indorsement,  attested  by  his  seal  of 
office,  to  be  countersigned  by  the  Treasurer  of  the  State,  which  transfer 
shall  divest  the  State  of  all  interest  in  such  bonds  or  stock,  and  invest  the 
same  in  the  holder  thereof.  Provided,  that  payment  shall  be  made  on  any 
claim  against  the  State  included  in  or  forming  a  part  of  articles  first,  second, 
fifth,  sixth,  seventh,  eighth,  and  eleventh ;  or  for  interest  which  may  have 
accrued  thereon,  included  in  articles  twelfth  and  thirteenth,  in  the  first  sec 
tion  of  this  act.  When  the  Governor  of  this  State  shall  be  notified  by  the 
President  of  the  United  States  that  the  Secretary  of  the  Treasury  of  the 
United  States  has  been  required  by  law  to  issue  to  the  State  of  Texas  the 
five  millions  of  dollars  of  stock  withheld  under  the  provisions  of  said  act, 
approved  September  9,  1850,  until  certain  creditors  shall  have  filed  releases 
at  the  Treasury  of  the  United  States,  as  therein  required ;  or  that  said 
Secretary  has  been  required  by  law  to  issue  to  the  State  of  Texas  sums  of 
said  stock,  equal  to  the  sums  for  which  the  State  may  at  any  time  present 
the  required  releases  from  any  portion  of  said  creditors,  at  the  Treasury  of 
the  United  States ;  after  which  notice,  such  claim  or  claims  shall  be  paid 
as  provided  for  in  other  cases ;  and  upon  payment  of  the  same,  or  any  por 
tion  of  said  claims,  the  corresponding  amount  of  bonds  of  the  reserved  five 
millions,  which  the  State  may  be  entitled  to  receive  under  the  proviso  of 
this  section,  shall  be  drawn  for  by  the  comptroller,  and  deposited  in  the 
treasury  of  the  State,  and  shall  be  regulated  and  transferred  in  the  same 
manner  as  provided  for  other  bonds,  and  together  with  the  surplus  left  of 
the  appropriation  named  in  the  first  section  of  this  act,  after  payment  of  the 
sums  to  which  it  is  to  be  applied,  appropriated  for,  and  paid  out  only  upon 
the  claims  embraced  in  articles  first,  second,  fifth,  sixth,  seventh,  eighth, 
eleventh,  twelfth,  and  thirteenth  of  this  act. 

SEC.  3.  That  it  shall  be  the  duty  of  the  comptroller,  immediately  after 
the  passage  of  this  act,  to  forward  to  the  Secretary  of  the  Treasury  of  the 
United  States  a  schedule  of  the  names  of  the  creditors,  for  the  payment  of 
whose  claims  conditional  provision  is  made  by  the  second  section  of  this  act, 
stating  the  amount  to  which  each  creditor  is  entitled, 


298  APPENDIX. 

SEC.  4.  That  before  the  payment  of  any  of  the  claims  provided  for  by 
this  act,  the  claimant  shall  be  required  to  sign  a  receipt  to  the  State  of  Texas, 
that  the  amount  so  received  is  in  full  liquidation  and  payment  of  the  claim 
or  claims  so  presented;  and  also  a  release  exonerating  the  United  States 
from  all  liability  for  the  same — said  release  to  be  in  form  as  prescribed  by 
the  Secretary  of  the  Treasury,  and  approved  by  the  President  of  the  United 
States,  for  releases  under  said  act,  approved  September  9,  1850,  and  that 
this  act  be  in  force  from  its  passage. 

Approved  January  31,  1852. 


T. 

REPORT   TO   PRESIDENT   OF   THE  UNITED    STATES,  BY   THE    SECRETARY   OP 
THE  TREASURY,  ON  THE  PUBLIC  DEBT  OF  TEXAS. 

In  obedience  to  your  order,  I  proceed  to  report  the  condition  and  amount 
of  the  debt  of  the  late  Jlepublic  of  Texas,  as  reported  to  me  by  the  author 
ities  of  the  State,  and  to  present  very  briefly  my  construction  of  the  powers 
and  duties  of  the  President,  as  prescribed  by  the  first  section  of  the  act  of 
Congress,  approved  September  9,  1850. 

By  the  act  referred  to,  in  consideration  of  certain  concessions  by  the 
State  of  Texas,  it  is  provided  that  the  United  States  "  shall  pay  to  the  State 
of  Texas  the  sum  of  ten  millions  of  dollars,  in  a  stock  bearing  five  per  cent, 
interest,  and  redeemable  at  the  end  of  fourteen  years,  the  interest  payable 
half  yearly  at  the  Treasury  of  the  United  States." 

In  the  same  section  of  the  law,  it  is  further  provided  "  that  no  more  than 
five  millions  of  said  stock  shall  be  issued  until  the  creditors  of  the  State 
holding  bonds  and  other  certificates  of  stock  of  Texas,  for  which  duties  on 
imports  were  specially  pledged,  shall  first  file  at  the  Treasury  of  the  United 
States  releases  of  all  claims  against  the  United  States  for  or  on  account  of 
said  bonds  or  certificates,  in  such  form  as  shall  be  prescribed  by  the  Secre 
tary  of  the  Treasury  and  approved  by  the  President  of  the  United  States." 

The  release  thus  provided  for  has  been  prescribed  by  the  Secretary  of 
the  Treasury  and  approved  by  the  President.  It  has  been  published  in  all 
the  leading  newspapers  in  the  commercial  cities  of  the  United  States,  and 
all  persons  holding  claims  of  the  kind  specified  in  the  foregoing  proviso 
were  required  to  file  their  releases  (in  the  form  thus  prescribed)  in  the 
Treasury  of  the  United  States,  on  or  before  the  1st  day  of  October,  1851. 
Although  this  publication  has  been  continued  from  the  25th  day  of  March, 


APPENDIX. 


1851,  yet,  up  to  this  time,  comparatively  few  releases  have  been  filed  by 
the  creditors  of  Texas. 

By  the  terms  of  the  law,  the  President  is  to  cause  the  stock  to  be  issued, 
and  the  restriction  which  forbids  the  issuing  of  five  millions  of  said  stock 
until  the  releases  of  claims,  as  stated  in  the  law,  attaches  to  the  stock  in 
his  hands. 

It  would  seem  to  result,  from  the  foregoing  propositions,  that  the  Presi 
dent  should  determine  what  classes  and  amounts  of  the  Texas  debts  shall 
be  released  to  the  United  States,  before  he  can  lawfully  deliver  the  whole 
of  the  ten  millions  of  stock  to  the  State  of  Texas. 

To  form  an  opinion  on  this  point,  it  becomes  necessary  to  ascertain  what 
portion  of  the  public  debt  of  Texas  was  contracted  by  her  while  an  inde 
pendent  Republic,  with  a  special  pledge  of  "  duties  on  imports"  for  its 
redemption. 

I  present  herewith  reports  marked  A,  B,  C,  D,  E,  F,  Gr,  and  IT,  certified 
by  the  auditor  of  the  State,  and  verified  by  the  signature  of  Governor  Bell 
and  the  seal  of  the  State. 

These  papers  show  the  laws  under  which  the  debts  of  Texas  were  con 
tracted,  and  the  amount  of  bonds  or  other  evidences  of  debt  issued  under 
the  laws  referred  to  respectively. 

The  amount  of  the  debt  in  the  aggregate  and  the  character  of  each  class 
is  presented  in  the  paper  accompanying  this  report,  submitted  to  me  by  the 
Assistant  Secretary  of  the  Treasury,  and  dated  September  10,  1851. 

From  these  papers  it  is  shown  that  the  public  debt  of  Texas,  with  inte 
rest  at  the  rate  prescribed  by  the  laws  under  which  it  was  contracted,  com 
puted  up  to  1st  of  July,  1850,  amounts,  in  the  whole,  to  the  sum  of  twelve 
millions  four  hundred  and  thirty-five  thousand  nine  hundred  and  eighty-two 
dollars  and  sixty-eight  cents  ($12,435,982  68). 

By  the  terms  of  the  act  of  Congress  of  9th  September,  1850,  five  of  the 
ten  millions  of  stock  provided  for  are  to  be  issued  to  Texas  at  once  ;  the 
remaining  five  are  to  be  withheld  by  the  President  until  all  claims  against 
the  United  States  for  that  portion  of  the  above-stated  public  debt  of  Texas, 
for  the  payment  of  which  the  "  duties  on  imports  are  specially  pledged," 
shall  be  released  to  the  United  States. 

What  class  or  amount  of  this  debt  falls  within  this  description  is  to  be 
ascertained  by  the  laws  of  Texas,  which  laws,  of  course,  form  the  basis  of 
the  contract  between  her  and  the  present  holders  of  these  claims. 

It  is  obvious,  from  the  most  careless  perusal  of  the  law,  that  Congress 
considered  the  United  States  as  liable  to  pay  all  that  portion  of  the  debt  of 
Texas  for  the  redemption  of  which  "  duties  on  imports"  had  been  pledged 
by  the  laws  of  Texas. 

Upon  no  other  hypothesis  is  there  any  justifiable  motive  for  requiring 


300  APPENDIX. 

releases  to  the  United  States  to  be  filed  for  such  claims,  before  Texas  should 
receive  the  last  five  millions  of  the  stock  to  be  paid  her.  In  other  words, 
Congress  admitted  the  liability  of  the  General  Government  to  pay  all  that 
portion  of  the  public  debt  of  Texas,  and  laid  its  hand  upon  five  millions  of 
the  stock  provided  for  as  a  security  that  Texas  should  pay  that  portion  of 
her  debt,  or,  in  her  failure  to  do  so,  the  five  millions  thus  withheld  should 
be  a  fund  out  of  which  that  class  of  the  creditors  of  both  Texas  and  the 
United  States  should  be  paid  in  whole  or  in  part,  as  the  relative  amount  of 
such  debt  and  the  fund  reserved  should  determine. 

The  history  of  the  debt  contracted  by  Texas  while  she  was  yet  an  inde 
pendent  power,  and  her  subsequent  incorporation  into  the  Union  as  a  State 
of  the  Republic  of  the  United  States,  it  is  believed,  makes  the  United  States 
liable  fur  this  portion  of  the  Texas  debt. 

The  laws  of  nations  which  govern  the  subject  are  well  understood,  and 
of  easy  application  to  the  present  question.  These  laws  all  proceed  upon 
the  idea  that  the  moral  obligations  of  independent  States  are  binding  when 
once  they  attach  to  compacts  between  States,  or  between  States  and  indi 
viduals,  and  that  they  never  cease  except  by  the  voluntary  agreement  of  the 
parties  interested,  or  by  their  fulfilment  and  complete  discharge.  Hence, 
where  an  independent  power  contracts  obligations,  and  is  afterwards,  by  the 
act  of  another  power,  jointly  with  herself,  inco'rporated  into  and  subjected 
to  the  dominion  of  the  latter,  whereby  the  national  responsibility  of  the 
former  is  destroyed,  and  the  means  of  fulfilling  her  obligations  transferred 
to  the  latter,  all  such  obligations,  to  the  extent  at  least  of  the  means  thus 
transferred,  attach  with  all  their  force  to  the  nation  to  whom  such  means 
have  been  so  transferred. 

It  will  be  found  that  all  writers  on  public  law  having  any  authority  are 
agreed  upon  this  point,  from  the  time  of  Grotius  to  the  present.  Indeed, 
the  proposition  thus  asserted  is  so  obviously  just  that  it  is  not  possible  for 
a  nation  in  modern  times  to  controvert  it,  without  forfeiting  that  character 
for  justice  and  probity  which,  happily  for  mankind,  has  become  indispens 
able  for  sovereign  States.  It  was  this  view  of  the  subject  which,  doubtless, 
dictated  that  provision  of  the  law  which  I  am  now  considering. 

It  was  known  to  Congress  that  Texas  had  contracted  debts  to  a  large  amount 
to  individuals  while  she  was  an  independent  power.  It  was  equally  well 
known  that  revenue  arising  from  "  duties  on  imports"  was,  amongst  all  na 
tions  in  modern  times,  one  resource,  if  not  the  principal  one,  for  the  payment 
of  the  debts  of  nations.  It  was  known,  also,  by  the  framcrs  of  this  act  that,  by 
the  annexation  of  Texas  to  the  United  States,  the  power  to  levy  duties  on 
imports  within  the  ports  or  territories  of  Texas  was  taken  away  from  the 
latter  and  transferred  to  the  United  States.  It  was  therefore  assumed  that 
the  United  States  should  pay,  if  Texas  did  not,  all  that  portion  of  the  debt 


APPENDIX.  301 

of  Texas  for  which  duties  on  imports  had  been  pledged  ;  for  the  obvious 
reason  that  these  duties  thus  pledged  were  taken  from  Texas  and  transfer 
red  to  the  United  States;  and  to  that  extent  the  creditors  of  Texas,  by  a 
plain  principle  of  justice,  had  become  the  creditors  of  the  United  States. 

With  these  facts  and  principles  for  the  basis  of  legislation,  the  question 
recurs,  what  class  of  debts  were  comprehended  in  the  terms  used  in  the 
law  ? 

I  entertain  no  doubt  of  what  was  the  design  of  Congress.  They  evidently 
intended  that  Texas  should  pay  out  of  the  ten  millions  granted  all  those 
debts  of  hers  for  which  they  deemed  the  United  States  had  become  liable 
by  the  incorporation  of  Texas  into  the  Union  ;  and  they  deemed  this  go 
vernment  liable  for  all  debts  of  Texas  for  the  payment  of  which  the  duties 
on  imports  had  been  pledged  in  any  form.  The  words  employed  are,  "for 
which  duties  on  imports  are  specially  pledged."  In  all  cases,  therefore, 
where  duties  on  imports  have,  by  the  laws  of  Texas,  been  specially  set  apart 
for  the  payment  of  any  loan,  in  my  judgment  it  becomes  the  duty  of  the 
President  to  require  the  releases  specified  in  the  law  of  Congress  before  he 
issues  to  Texas  the  remaining  five  millions  of  stock. 

By  the  act  of  7th  June,  1837,  the  Republic  of  Texas  pledged  her  public 
faith  for  the  redemption  of  every  loan  under  that  law,  and  also  "  so  much 
of  the  revenue  arising  from  imports  and  direct  taxation  as  may  be  neces 
sary  to  meet  the  annual  interest  of  the  funded  debt."  (See  Schedule  A, 
and  the  law  there  quoted.)  Under  this  act,  as  appears  by  Schedule  A,  a 
loan  was  effected,  which,  with  its  interest,  leaves  outstanding  on  the  1st  of 
July,  1850,  $1,651,590  02. 

The  terms  of  the  law  plainly  secure,  by  a  pledge  of  import  duties,  the 
payment  of  the  interest,  which,  in  effect,  is  a  special  pledge  of  duties  on 
imports  for  the  payment  of  the  interest,  which  interest,  while  the  fund  set 
apart  remains,  is  perpetually  secured.  This,  then,  is  one  of  the  loans  coming 
within  the  proviso  referred  to,  releases  of  which  should  be  filed  in  the  trea 
sury  of  the  United  States,  for  all  interest  which  has  accrued  or  may  accrue 
before  the  remaining  five  millions  of  stock  can  be  issued  to  Texas. 

The  loans  designated  in  Schedule  B  were  made  under  the  acts  of  the 
18th  November,  1836;  the  16th  of  May,  1838;  22d  January,  1839;  14th 
January,  1840;  and  5th  February,  1840.  The  amount,  with  interest  com 
puted  to  1st  July,  1850,  under. these  acts,  is  $2,582,902  70. 

By  the  9th  section  of  the  act  of  1836,  the  public  faith,  the  proceeds  of 
the  sales  of  public  lands,  and  all  the  taxes  on  lands,  which  may  accrue  to 
the  State  after  the  year  1838,  are  set  apart  for  the  payment  of  the  interest 
and  principal  of  the  loan  therein  provided  for. 

The  only  provision  of  the  before-mentioned  laws  which  it  seems  important 
to  consider  as  bearing  on  the  act  of  Congress  in  question,  is  the  15th  section 


302  APPENDIX. 

of  the  act  of  14th  January,  1840.     That  section  contains  the  following 
provision  : — 

"Be  it  further  enacted,  That,  for  the  redemption  of  all  loans  negotiated 
by  the  authority  of  the  Republic  of  Texas,  independently  of  the  reservation 
of  the  sinking  fund,  the  proceeds  of  the  sales  of  the  public  lands,  its  revenues, 
and  public  faith  are  solemnly  pledged." 

It  seems  perfectly  clear  that  a  pledge  of  all  the  revenue  of  a  government 
whose  organic  form  admitted  the  power  to  raise  revenue  by  "  duties  on  im 
ports"  is  a  special  pledge  of  duties  on  imports,  as  well  as  all  the  other 
sources  of  taxation  known  to  such  government.  If,  instead  of  a  pledge  of 
the  "revenues,"  a  term  comprehending  every  item  of  revenue,  another  form 
of  expression  had  been  adopted,  which  had  enumerated  each  item,  includ 
ing  duties  on  imports,  then  no  one  would  doubt  that  the  law  contained  a 
special  pledge  of  the  duties  on  imports. 

If,  then,  the  pledge  of  all  "  revenue,"  without  enumeration  of  items  or 
classes,  does  not  include  duty  on  imports,  neither  does  it,  for  the  same 
reason,  include  any  other  species  of  revenue ;  and  thus  it  would  follow 
that  nothing  was  pledged  by  the  act  in  question — an  absurdity  too  flagrant 
for  consideration.  Such  a  construction  would  admit  the  possibility  of  an 
intention  by  the  Congress  of  Texas  to  hold  out  to  the  world  a  delusive 
promise  seeming  to  be  substantial,  and  yet,  in  fact,  offering  no  real  security. 
The  section  referred  to,  therefore,  must  be  considered  as  pledging  specially 
the  duties  on  imports,  as  well  as  any  other  species  of  revenue  possible  under 
the  government  then  existing.  If  these  views  are  correct,  all  loans  nego 
tiated  by  Texas  prior  to  the  14th  January,  1840,  and  under  that  act,  are 
secured  by  a  special  pledge  of  the  duties  on  imports.  It  follows  that  the 
five  millions  of  stock  specified  in  the  act  of  Congress  of  the  9th  September, 
1850,  should  not  be  issued  until  releases  are  filed  as  prescribed  by  all 
owners  of  that  portion  of  the  debt  of  Texas. 

The  public  debt  created  under  one  of  the  acts  of  5th  February,  1840,  is 
stated,  in  Schedule  C,  to  amount,  with  interest  up  to  1st  July,  1850,  to 
the  sum  of  $1,628,936  26.  I  do  not  find  any  pledge  in  this  act  for  the 
payment  of  either  the  principal  or  interest  of  this  portion  of  the  debt. 

The  debt  set  out  in  Schedule  D,  with  interest  up  to  1st  July,  1850,  is 
$1,472,918  80. 

This  debt  was  created  under  another  act  of  the  5th  February,  1840.  By 
the  3d  section  of  this  act,  it  is  provided  that  "  the  bonds  before  referred  to 
shall  be  at  all  times  receivable  by  any  collector  of  revenue,  or  at  the  Trea 
sury  Department,  in  payment  of  any  debt  to  the  government,  or  any  duties 
by  imports  or  direct  taxation,  for  the  amount  or  value  of  such  funds,  and 
the  interest  which  may  have  accrued  thereon." 

It  will  be  seen,  by  inspection  of  the  specimen  of  the  bonds  under  this 


APPENDIX.  303 

act,  furnished  in  Schedule  D,  that  the  pledge  is  stated  on  its  face.  The 
phrase,  "  receivable  for  all  government  dues,"  is  printed  on  the  face  of  this 
stock  in  conspicuous  capitals.  I  cannot  suppose  that  any  interpretation 
can  be  given  to  this  act  which  would  exclude  the  idea  of  a  special  pledge 
of  duties  or  "  dues"  to  the  government  arising  from  "  imports."  It  would 
seem  that  no  language  could  create  a  special  pledge  of  duties  on  imports,  if 
a  promise  to  receive  the  stock  in  payment  for  all  government  dues  arising, 
in  the  language  of  the  law,  "  from  imports  or  direct  taxation,"  does  not. 

I  am  of  opinion,  therefore,  that  the  debt  set  out  in  Schedule  D,  amount 
ing  to  $1,472,918  80,  should  be  released  in  the  form  prescribed  and  ap 
proved  by  the  President  before  the  issue  to  Texas  of  the  last  five  millions 
of  stock,  as  provided  in  the  act  of  Congress  of  the  9th  September,  1850. 

The  issues  set  forth  in  Schedule  E  are  not  sufficiently  described  to  enable 
me  to  determine  whether  the  whole  sum  of  issues  there  put  down  are  go 
verned  by  the  same  laws.  It  is  quite  certain  that  the  sum  of  $420,000  of 
principal  and  $89,000  of  interest  are  due  on  notes  issued  and  made  re 
ceivable  "for  all  dues  to  the  government."  The  $2,586,546  may,  or  may 
not  fall  within  any  of  the  laws  before  mentioned  as  containing  a  special 
pledge.  If  the  latter  were  issued  prior  to  the  law  of  the  14th  January, 
1840,  then  they  would  be  covered  by  the  provisions  of  the  15th  section  of 
that  act,  which  pledges  the  "  revenues"  of  Texas  for  their  redemption;  and, 
in  my  judgment,  all  issues  of  evidence  of  public  debt  of  Texas  prior  to  that 
law  come  within  the  fair  meaning  of  the  proviso  in  the  first  section  of  the 
act  of  Congress  of  the  9th  September,  1850.  I  am  also  clearly  of  opinion 
that  any  portion  of  her  public  debt  which,  by  the  laws  of  Texas,  is  made 
receivable  in  payment  of  "all  dues  to  the  government,"  are  claims  for 
which  the  revenue  arising  from  duties  on  imports  are  specially  pledged. 

As  the  report  of  the  authorities  of  Texas  does  not  enable  me  to  say  what 
amounts  are  covered  by  the  foregoing  principles,  it  is  only  necessary  for  the 
information  of  holders  of  the  debt  that  they  should  know  the  classes  which 
the  President  deems  it  right  should  be  released  before  the  last  five  millions 
of  stock  can  be  issued  to  the  Government  of  Texas. 

The  amount  set  out  in  Schedule  F,  being  $2,117,181  68,  is  made  up  of 
parts  of  previous  issues  under  the  laws  of  Texas,  and  it  does  not  appear 
what  portion  of  this  amount  falls  within  any  of  the  laws  of  Texas  author 
izing  issues  or  loans. 

I  repeat,  therefore,  that,  for  the  information  of  all  concerned,  it  will 
suffice  to  declare  that  all  the  public  debt  of  Texas  created  prior  to  the  act 
of  Congress  of  that  Republic  of  the  14th  January,  1840,  and  all  the  debt 
of  said  Republic  made  receivable  for  all  public  dues,  are,  in  my  judgment, 
debts  of  Texas,  for  which  the  duties  on  imports  are  specially  pledged,  and 
that  releases  of  all  claim  against  the  United  States  for  or  on  account  of  such 


304  APPENDIX. 

debts  should  be  filed  in  the  Treasury  Department  of  the  United  States 
before  the  President  will  be  justified  in  issuing  the  second  five  millions  of 
stock  to  Texas  as  provided  in  the  act  of  Congress  of  the  9th  September, 
1850. 

These  views,  though  hastily  sketched  at  this  time,  under  the  pressure  of 
much  indispensable  current  business,  are.  nevertheless,  the  result  of  much 
previous  reflection  and  examination.  I  find  them  to  accord  with  a  very 
elaborate  argument  on  the  subject,  presented  by  the  late  Attorney-General 
(R.  Johnson),  and  therefore  submit  them  with  entire  confidence  in  the  legal 
conclusions  stated. 

Very  respectfully  submitted. 

THOS.  CORWIN, 

Secretary  of  the  Treasury. 
To  the  President. 

EXECUTIVE  CHAMBER,  WASHINGTON,  Sept.  13,  1851. 
Concurring  in  the  conclusions  of  the  foregoing  report,  the  Secretary  of 
the  Treasury  is  hereby  directed  to  issue  the  last  five  millions  of  stock  to 
Texas,  on  the  condition  specified  in  said  report. 

MILLARD  FILLMORE. 


U. 

REPORT  OF  THE  AUDITOR  AND  COMPTROLLER  TO  THE  FOURTH  LEGISLATURE 
ON  THE  PUBLIC  DEBT  OF  TEXAS. 

AUSTIN,  November  12,  1851. 
To  the  Honorable  Legislature  of  the  State  of  Texas  : 

In  conformity  to  the  requirements  of  "  an  act  to  provide  for  ascertaining 
the  debt  of  the  late  Republic  of  Texas,"  approved  20th  March,  1848,  and 
the  act  supplementary  thereto,  approved  February  8th,  1850,  we  respect 
fully  submit  the  following  report — exhibiting  the  amount,  character,  and 
classification  of  the  claims  filed  and  receipted  for  by  us,  under  the  provi 
sions  of  said  acts : — 


APPENDIX. 


305 


7,970  43 

754,000  00 

24,280  00 

766,800  00 


331,371  00 


74,441  26 
42,387  73 


457,380  00 
195,907  00 


280,000  00 
$5,436,886  22 


Interest  on  the  above  liabilities  is 
sued  subject  to  interest,  as  stated 
in  tlie  face  of  the  certificates 

Additional  interest  to  1st  July, 
1850,  allowed,  by  act  approved 
llth  Feb.  1850,  on  claims  which 
had  been  audited  prior  to  its 
passage  .  .  . 


Kate. 


at  70  cts. 


1  00 


30 


30 


20 


41,630  00         1  00 


FIRST    CLASS, 

Consisting  of  audited  or  ascertained  Claims. 

Character  of  liabilities  receipted  for.  Ostensible. 

Ten  per  cent,    consolidated    fund 

created  by  act  of  7th  June,  1837      $632,526  80 
Ten   per   cent,    consolidated    fund 

created  by  act  of  7th  June,  1837, 

issued  under  an  act  for  the  relief 

of  Swartwout  and  others   .     .     . 
Ten  per  cent,  funded  debt  created 

by  act  of  5th  February,  1840       . 
Eight  per  cent,  funded  debt  created 

by  act  of  5th  February,  1840 
Eight    per    cent,    treasury    bonds 

created  by  act  of  5th  Feb.  1840 
Ten  per  cent,  treasury  notes  issued 

under  act  of  the  9th  June,  1837, 

first  issue 

Ten  per  cent,  treasury  notes  issued 

under  act  of  9th  June,  1837,  se 
cond  issue 

Treasury   notes,    without   interest, 

issued  under  act  of  19th  January, 

1839,  third  issue 1,828,192  00 

Audited  paper  issued  under  various 

enactments 

Miscellaneous  liabilities    .... 
Ten  per  cent,  bonds  issued  by  com 
missioners  to  negotiate  a  loan  for 

$5,000,000,  viz.:— 

For   loan    obtained    from    Bank 
United  States 

For  purchase  of  steamer  "Zavalla" 
"          "          Naval  vessels  un 
der  contract  with  F.  Dawson, 
now  owned  by  James  Schott 
and  E.  D.  Whitney    .... 


50 


25 

various. 
1  00 


50 


60 


2,927,365  50        various. 


$8,364,251  72 


239,139  06        various. 


Par  yalue. 

$442,768  76 

7,970  43 
226,200  00 

7,284  00 
153,360  00 

41,630  00 
165,685  50 

457,048  00 

69,451  52 
42,387  73 


400,000  00 
97,953  50 


140,000  00 
$2,251,739  44 


1,468,185  26 
$3,719,914  70 


113,664  80 


20 


306  APPENDIX. 


Character  of  liabilities  receipted  for.  Ostensible.  Rate.  Par  value. 

Total  amount  filed  of  first  class,  in 
cluding  interest  due  thereon  to 
1st  July,  1850 $8,603,390  78  $3,833,579  50 

Less  amount  redeemed  by  issues 

of  land-script 1G,257  86  1  00  16,257  86 


Total  amount  first  class  debt  filed, 
and  unredeemed $8,587,132  92  $3,817,321  64 

SECOND    CLASS, 

Consisting  of  Claims  sufficiently  authenticated  to  admit  them  to  audit  under  the  laws  of 

the  late  Republic. 

Ostensible  amount.  Par  value. 

Amount  filed  and  receipted  for    ....     $755,218  05  $682,672  57 
"         "                 "             as  third  class 

claims  since  recognized 16,467  95  16,467  95 

Amount  audited  by  special  acts  of  Legis 
lature      72,077  28  72,077  28 

Estimated  amount  on  file  not  acted  on  .     .        125,00000  125,00000 


$968,763  28  $896,217  80 

Less  amount  redeemed  by  the  issue  of 
land-script  and  in  payment  of  revenue 
that  accrued  under  the  late  Republic  6,318  16  3,450  17 


Total  amount  of  second  class  debts  filed          $962,44512  $892,76763 

THIRD    CLASS, 

Consisting  of  Claims  not  sufficiently  authenticated  to  authorize  their  being  audited  under 
the  laws  of  the  late  Republic. 

Ostensible  amount.  Par  value. 

Amount    filed    and    receipted    for,    less 

$16,467  95,  recognized  and  included  in 
the  preceding  statement  of  second  class 

claims $47,675  10  $47,675  10 

Estimated  amount  on  file  not  acted  on       .          50,000  00  50,000  00 


Total  amount  third  class  filed      ....        $97,675  10  $97,675  10 

RECAPITULATION. 

Ostensible  amount.  Par  value. 

Amount  of  first  class $8,587,13292  $3,817,32154 

second  class 962,445  12  892,767  63 

third  class   J 97,675  10  97,675  10 

Totals $9,647,253  14  $4,807,764  37 

From  the   foregoing  statement,  it  will   be  perceived  that    the  entire 
amount  of  claims  filed,  including  interest  on  all  liabilities  stipulated  to 


APPENDIX.  307 

bear  interest,  amounts  to  $9,647,253  14;  and,  according  to  the  value  we 
have  assigned  them,  they  were  worth  to  the  government  $4,807,764  37. 

As  nothing  has  occurred  since  our  report  of  27th  December,  1849,  to 
induce  a  change  in  our  opinions  respecting  the  rule  which  governed  us  in 
assigning  an  equivalent  value  to  each  class  of  liabilities  filed,  we  will  re 
peat  the  substance  of  the  remarks  in  said  report,  as  the  reasons  which 
guided  us  in  the  discharge  of  that  part  of  our  official  duty. 

TREASURY  NOTES. 

The  first  issue  of  this  character  of  indebtedness  is  known  as  the  printed 
interest  notes.  They  were  put  in  circulation  during  the  fall  and  winter  of 
1837,  for  a  temporary  purpose,  and  until  the  engraved  notes  could  be  pro 
cured;  as  soon  as  they  were  received,  the  further  issue  and  reissue  of  the 
former  ceased.  This  occurred  before  any  perceptible  depreciation  had 
taken  place,  and  it  was  the  usage  of  the  department  to  cancel  them  as  they 
were  received.  Hence,  the  government,  for  this  class  of  liability,  received 
full  consideration,  and  we  have  so  rated  it. 

To  the  engraved  interest  notes,  we  have  assigned  an  average  value  of 
50  cents  on  the  dollar.  These  notes  were  issued  under  the  provisions  of 
the  same  act  that  the  printed  bills  were,  and  took  their  place.  About  the 
time  of  the  first  issue  of  these  notes  (the  spring  of  1838),  this  species  of  the 
government  paper  commenced  depreciating  in  value,  so  that,  when  the  act 
of  19th  of  January,  1839,  prohibiting  their  further  issue;  went  into  opera 
tion,  they  were  worth  but  about  40  cents  on  the  dollar. 

To  the  treasury  notes  not  bearing  interest,  generally  known  as  "  red 
backs,"  we  have  assigned  an  average  value  of  25  cents  on  the  dollar.  These 
notes  superseded  the  engraved  interest  notes  above  referred  to,  and  the  first 
issue  of  them  was  made  during  the  spring  of  1839,  when  they  were  worth 
about  37 £  cents  on  the  dollar.  They  continued  depreciating,  so  that  in 
1841,  the  government  was  compelled  to  pay  them  out  at  from  12  to  15 
cents  on  the  dollar.  The  value  which  we  have  given  them  is  conceived  to 
be  equitable,  as  an  average,  both  to  the  government  and  the  holders.  It  is 
impossible  to  ascertain  from  the  date  of  the  issue  of  these  bills,  as  shown 
on  the  face,  what  they  were  worth  when  last  paid  out.  For  instance,  a  bill 
issued  in  1839,  at  say  37 1  cents  on  the  dollar,  and  after  having  been 
returned  to  the  treasury  in  collection  of  revenue,  may  have  been  reissued 
the  year  following  at  25  cents  on  the  dollar,  and  so  on;  and  in  1841, 
when  it  may  have  been  last  paid  out  at  one-eighth  of  its  ostensible  value. 

CONSOLIDATED  FUNDED  DEBT  OF  7TH  JUNE,  1837. 

The  stock  known  by  this  title  was  issued  under  the  provisions  of  an  act 
of  Congress  approved  June  7, 1837,  and,  could  it  be  analyzed,  would  be  sub- 


308  APPENDIX. 

ject  to  the  greatest  variety  of  equivalent  rates.  We  found  it  impracticable 
to  refer,  in  each  instance,  to  the  original  record,  to  ascertain  at  what  rate 
each  claim  had  been  audited,  for  which  this  stock  was  issued.  Even  had, 
or  could  we  have  done  so,  we  would  have  failed  to  a  great  extent  in  acquir 
ing  this  information,  for  the  reason  that  the  government,  for  a  long  time, 
would  not  acknowledge  any  discount  on  her  paper;  and  the  result  was  that 
accounts  were  made  out,  augmented  in  amount,  so  as  to  make  good  the  de 
ficit  in  the  value  of  the  currency.  Hence,  the  only  practicable  mode  which 
suggested  itself  was  to  make  an  average  of  what  the  stock  availed  the  go 
vernment;  which  we  accordingly  did,  and  assigned  to  it  a  value  of  seventy 
cents  on  the  dollar.  It  is  believed  that  this  average  is  about  what  the  go 
vernment  received  in  the  main,  and  will,  with  a  few  exceptions  (which  will 
be  alluded  to  hereafter),  fully  remunerate  the  present  holders,  as  it  is  now 
generally  in  the  hands  of  third  parties,  who,  in  most  instances,  acquired  it 
at  a  much  less  value  from  the  original  investor  than  that  now  assigned  it. 

EIGHT  AND  TEN  PER  CENT.  FUNDED  DEBT  OF  5lH  FEBRUARY,  1840. 

"We  have  assigned  to  this  class  of  securities  an  average  value  of  thirty 
cents  on  the  dollar.  This  stock  was  issued  under  the  authority  of  an  act 
of  Congress  approved  February  5,  1840,  and  was  created  for  the  purpose  of 
withdrawing  and  lessening  the  amount  of  revenue  currency  then  in  circula 
tion,  with  a  view  of  enhancing  the  value  of  the  residue.  The  inducements 
held  out  to  the  creditors  to  surrender  a  revenue  currency,  and  to  take  one 
which  could  not  be  used  in  that  way,  was  the  promise  of  the  government  to 
pay  the  stipulated  interest  semiannually  in  specie;  which,  it  is  well  known, 
she  was  unable  to  do.  The  value  attached  to  this  stock  may  act  onerously 
on  some  holders,  but  it  will  fully  remunerate  a  large  majority.  It  would 
be  much  more  difficult  in  this  fund  than  any  other  to  ascertain  the  exact 
value  the  government  received  for  the  investments  in  it,  as  it  is  composed 
of  interest  notes,  "  red  backs,"  and  audited  paper. 

EIGHT  PER  CENT.  TREASURY  BONDS. 

Twenty  cents  on  the  dollar  is  the  average  equivalent  value  assigned  this 
class  of  the  government  paper.  These  bonds  were  issued  to  supersede,  to 
some  extent,  and  take  the  place  of  treasury  notes.  There  is  less  danger  of 
individual  hardship  growing  out  of  the  assignment  of  an  average  equivalent 
value  to  these  bonds,  than  that  of  any  other  of  the  government  securities : 
they  were  seldom  ever  issued  at  more  than  twenty-five  cents  on  the  dollar, 
and  rarely  less  than  fifteen  cents  on  the  dollar.  The  value  assigned  them 
is  deemed  equitable. 


APPENDIX.  309 

AUDITED  PAPER, 

When  issued  at  par,  has  been  allowed  accordingly;  when  less  than  par, 
a  corresponding  deduction  has  been  made;  the  records  and  vouchers  showing 
the  rate  at  which  it  was  audited. 

In  the  first  class,  are  included  the  bonds  issued  to  the  Bank  of  the  United 
States  for  a  loan  of  $400,000  obtained  from  that  institution  in  the  year 
1839;  also,  the  claim  of  James  Holford  and  associates  for  the  purchase  of 
the  steamer  "Zavalla."  A  value  corresponding  to  what  the  government 
actually  received  has  been  assigned  to  each. 

Since  our  last  report,  Messrs.  James  Schott  and  E.  D.  Whitney  have  filed 
their  claims,  composed  of  one  of  the  bonds  issued  to  Frederick  Dawson,  of 
Baltimore,  in  payment  for  the  navy.  These  gentlemen,  although  not  known 
in  the  contract,  are  acknowledged  by  Mr.  Dawson  to  have  been  equally  in 
terested  in  that  transaction;  and  the  readiness  manifested  in  aiding  the 
cause  of  Texas,  by  undertaking  and  carrying  out  a  contract  requiring  a  large 
pecuniary  outlay  at  a  time  when  the  public  credit  was  at  an  exceeding  low 
stage,  procured  for  the  contractors  the  commendations  of  the  late  Republic. 
In  assigning  to  this  claim  fifty  cents  on  the  dollar,  as  the  value  received  by 
the  government,  we  have  been  governed  by  the  law  making  the  appropria 
tion,  and  the  contract  entered  into  by  the  agent  of  the  government  and  Mr. 
Dawson.  This  contract,  subsequently  recognized  by  legislative  enactment 
(a  copy  of  which  accompanies),  stipulates  the  price  of  the  vessels  at 
$280,000 ;  to  secure  the  payment  of  which,  two  bonds  of  the  Republic  for 
$280,000  each  were  deposited  with  the  President  of  the  Girard  Bank  at 
Philadelphia,  with  the  understanding  that  they  could  be  redeemed,  at  the 
end  of  twelve  months,  by  the  payment  of  $280,000  and  ten  per  cent,  interest 
on  the  two  bonds;  otherwise,  the  said  bonds  to  become  the  property  of  Mr. 
Dawson.  The  government  was  unable  to  meet  the  payment  at  the  time 
specified ;  and  the  president  of  the  bank,  according  to  instructions,  delivered 
the  bonds,  amounting  to  $560,000,  to  Mr.  Dawson.  We  accompany  this 
statement  with  a  communication  from  Messrs.  Schott  and  Whitney,  expla 
natory  of  their  claim,  which  is  marked  "B." 

It  may  be  proper  to  remark  that  the  terms  of  the  contract  between  the 
government  and  James  Holford  and  associates,  for  the  purchase  of  the 
steamer  "  Zavalla/'  are  similar  to  that  entered  into  with  Mr.  Dawson. 

In  the  average  value  assigned  to  the  consolidated  fund  of  7th  June,  1837, 
there  came  to  our  knowledge  a  few  cases  of  hardship,  where  the  government 
had  received  full  consideration  for  the  original  obligation  which  had  been 
converted  into  this  fund,  and  yet  owned  by  the  original  investor.  Had  we 
departed  from  the  rate  we  had  assigned  to  this  or  any  other  character  of 
liability  in  one  instance,  no  matter  how  justifiable,  others  not  possessing  the 
same  merit  would  have  claimed  it;  and  the  consequence  would  have  been, 


310  APPENDIX. 

that  but  few  claimants  would  have  been  satisfied  with  any  other  classification 
than  that  of  par.  For  this  reason,  we  determined,  in  all  instances,  to  adhere 
to  the  rate  affixed  to  each  class,  and  report  such  cases  of  hardship  as  might 
arise,  to  the  Legislature,  in  order  that  such  relief  may  be  awarded  in  the 
premises  as  appears  to  be  just.  We  therefore  accompany  this  report  with 
a  statement  marked  "  C,"  of  such  cases,  and  hope  the  same  will  receive  your 
favorable  consideration.  In  this  connection,  we  refer  you  to  the  communi 
cation  of  Dr.  John  W.  King,  upon  the  subject  of  his  claim,  which  is  in 
closed  in  the  statement  last  named. 

On  the  liabilities  stipulated  to  bear  interest,  we  have  calculated  it  from 
the  date  of  last  payment  to  the  1st  of  July,  1850,  in  accordance  with  an 
act  approved  February  11,  1850,  except  the  interest  treasury  notes,  on 
which  we  have  allowed  interest  to  the  1st  of  January,  1841;  as  all  holders 
of  this  character  of  notes  were  required  to  fund  them  by  that  time,  and  the 
appropriation  for  the  further  payment  of  interest  on  said  notes  was  cancelled. 

It  may  be  proper  to  remark  that  we  have  attached  the  same  value  to  the 
interest  which  had  accrued  on  the  several  classes  of  liabilities  that  we  at 
tached  to  the  liabilities  themselves. 

THE  SECOND  CLASS 

Is  composed  of  claims  against  the  late  Republic  of  Texas  which  had  not 
previously  been  audited,  but  contracted  under  the  sanction  of  law.  We 
have  assigned  to  this  class  of  claims,  as  we  did  to  the  first  class,  an  equiva 
lent  value  proportionate  to  what  each  claim  availed  the  government  in  gold 
and  silver,  as  far  as  it  was  in  our  power  to  do.  Owing  to  the  large  number 
of  claims  filed  immediately  preceding  the  expiration  of  the  law  under  which 
we  acted,  we  have  been  unable  to  complete  the  examination  and  registration 
of  the  second  and  third  classes.  We  have  therefore  ascertained,  as  nearly 
as  practicable,  the  amount  of  unexamined  claims  filed,  and  report  them  in 
bulk. 

THE  THIRD  CLASS. 

This  class  is  composed  of  claims  for  the  auditing  of  which  the  existing 
laws  have  made  no  provision,  or  where  the  proof  is  insufficient.  In  it, 
however,  are  many  meritorious  claims,  which  will  require  special  legislation 
to  place  them  on  the  same  footing  with  valid  claims  against  the  government. 

A  number  of  claims  have  been  filed  for  losses  sustained  during  the  Revo 
lution  and  subsequent  invasions,  being  caused  by  the  destruction  of  property 
by  our  own  army  and  that  of  the  enemy.  On  this  character  of  claims,  we 
have  declined  taking  any  action;  informing  the  claimants  that  the  same 
would  be  referred  to  the  Legislature,  for  their  consideration  and  action 
thereon.  These  claims,  numbered  from  1  to  71,  amounting  to  $426,314  03, 
will  be  found  accompanying,  marked  "D." 


APPENDIX.  311 

It  is  necessary  that  some  mode  of  assignment  of  the  certificates  of  in 
debtedness  issued  should  be  prescribed  by  law. 

We  have  audited  the  claims  of  those  who  performed  military  service, 
where  the  needful  evidence  was  on  file,  regardless  of  any  application  of  the 
claimants  holding  the  certificate,  subject  to  his  order  or  that  of  his  legal 
representative.  As  many  of  these  parties  are  now  deceased,  the  proceeds  of 
these  claims  should  inure  to  the  benefit  of  the  heirs  of  the  deceased.  We, 
therefore,  respectfully  recommend  the  enactment  of  the  necessary  law  to 
protect  the  rights  of  the  widows  and  orphans  of  those  who  may  have  fallen 
in  the  defence  of  the  country,  by  prescribing  the  necessary  regulations  to 
prevent  persons  from  administering  for  the  purposes  of  speculation.  A  law 
of  this  character  was  enacted  by  the  Congress  of  the  late  Republic,  for  the 
protection  of  the  estates  .of  deceased  soldiers  of  the  Georgia  battalion. — 
[See  article  1053,  Hartley's  Digest.] 

Statements  of  several  claims  that  would  come  under  the  second  class  were 
presented  within  the  term  of  limitation,  but  unaccompanied  with  the  needful 
proof.  This  the  claimants  not  being  able  to  procure  before  the  expiration 
of  the  limit,  desire  the  privilege  of  producing  hereafter.  The  statements 
have  been  filed,  but  could  not  be  acted  on;  and  it  may  be  a  subject  worthy 
of  consideration,  whether  additional  time  should  not  be  allowed  for  the  pre 
sentation  of  testimony  in  such  cases,  if  a  general  extension  of  the  limit  be 
not  granted. 

Supposing  that  all  the  claims  against  the  late  government,  as  shown  by 
the  official  records,  including  the  amount  of  supposed  unaudited  claims  out 
standing,  had  been  filed  as  required  by  law,  and  assigning  each  class  of 
those  not  filed  the  same  equivalent  value  we  have  to  those  filed,  the  debt 
would  then  be  as  follows : — 

Ostensible.  Par. 

Claims  filed,  of  all  descriptions,  including  interest 

as  before  stated $9,647,253  14  $4,807,764  37 

Claims  not  filed,  of  all  descriptions,  including  in 
terest  2,789,738  20  2,019,514  27 


Total  debt  with  interest,  including  the  amount 
filed  and  unfiled $12,436,991  34      $6,827,278  64 

All  of  which  will  more  fully  appear   by  reference  to  the  accompanying 
statement,  marked  "A." 

Accompanying  this  report,  is  a  register  of  the  several  claims  acted  on  by 
us,  which  we  respectfully  request  may  be  returned  when  it  shall  no  longer 
be  required  by  your  honorable  body. 

.JOHN  M.  SWISHER,  Auditor. 
JAMES  B.  SHAW,  Comptroller. 


312  APPENDIX. 

V. 

MR.  PEARCE'S  REPORT. 
Senate  of  the  United  States,  August  17, 1852. 

The  Committee  on  Finance,  to  whom  were  referred  sundry  memorials 
from  creditors  of  the  late  Republic  of  Texas,  report : — 

That  the  object  of  the  memorialists  is  to  obtain  directly  from  the  treasury 
of  the  United  States  the  payment  of  their  claims  against  Texas,  for  which 
that  State  had  pledged  its  revenues  from  customs.  They  rest  their  claim 
upon  these  grounds  : — 

first:  Because,  when  one  nation  is  merged  in  another,  "  the  superemi- 
nent  power  which  represents  the  individual  and  united  sovereignty  of  both 
becomes  responsible  for  the  debts  of  the  subordinate  State." 

Second:  Because  the  G-overnment  of  the  United  States  having  appro 
priated  to  itself,  under  the  articles  of  annexation,  the  revenues  of  Texas 
arising  from  custom-house  duties,  which  were,  as  the  memorialists  say, 
solemnly  mortgaged  to  them  for  the  payment  of  their  respective  securities, 
they  have  a  clear  right  to  ask  payment  of  Congress. 

And,  third:  They  consider  the  obligation  of  the  United  States  to  pay 
these  claims  as  virtually  admitted  by  the  provisions  of  the  act  of  Septem 
ber,  1850,  commonly  called  the  Texas  "  Boundary  Law." 

The  first  of  these  reasons  the  committee  do  not  think  fairly  applicable  to 
the  case.  It  is  true  that  the  publicists  recognize  the  doctrine  that,  when  a 
lawful  power  contracts,  it  lays  an  obligation  on  the  nation  itself,  and  conse 
quently  on  all  the  future  conductors  of  the  community.  So  that,  when  a 
separate  sovereignty  or  people,  being  under  such  obligations,  becomes  united 
with  and  merged  in  another,  the  obligations  of  the  government  or  people  so 
merged  fall  upon  the  people  or  power  by  whom  they  are  so  absorbed ;  and 
that  this  is  a  just  and  proper  transfer  of  obligation  must  be  obvious  when- 
it  is  considered  that  otherwise  the  obligations  of  the  community  which  thus 
loses  its  separate  existence  would  be  entirely  annulled,  since  there  would 
be  no  body  politic  of  whom  the  performance  of  such  obligations  could  be 
demanded. 

But  that  is  not  the  case  of  Texas.  Under  our  peculiar  form  of  govern 
ment  and  the  articles  of  annexation,  she  has  indeed  parted  with  her  exter 
nal  sovereignty.  That,  by  our  constitutional  provisions,  is  vested  exclu 
sively  in  the  Union.  But  her  internal  sovereignty,  though  somewhat 
modified  in  certain  particulars  by  the  Constitution  of  the  United  States, 


APPENDIX.  313 

still  remains  in  full  force  and  vigor.  She  is  still  a  separate  State,  with  an 
independent  government;  a  distinct  community,  with  full  power  and  right 
to  manage  her  own  separate  affairs ;  still  liable  for  her  debts,  to  the  pay 
ment  of  which,  according  to  the  terms  of  the  contract,  she  has  pledged  her 
faith,  her  revenues,  and  her  honor ;  with  full  capacity  to  contract  new  lia 
bilities,  with  ample  resources  to  pay  all  her  debts,  and  with  every  induce 
ment  of  plighted  faith,  of  public  character,  of  justice  and  honor,  to  redeem 
those  obligations  which  she  contracted  when  her  fortunes  seemed  almost 
desperate,  and  which  furnished  her  with  the  means  of  securing  liberty, 
independence,  and  empire. 

The  second  reason,  however,  has  more  force. 

The  publicists  maintain  that  when  a  province  is  conquered  and  the  con 
quest  is  consummated  by  cession,  it  ceases  to  be  a  part  of  the  State  from 
which  it  is  wrested,  and  becomes  a  stranger  to  its  obligations.  "  But  in 
that  case  the  conqueror  acquires  no  rights  but  those  of  the  State  with 
which  he  is  at  war,  and  takes  subject  to  all  absolute  or  qualified  alienations 
previously  made/7  Thus  the  King  of  Prussia,  when  he  acquired  Silesia  by 
conquest  and  cession,  bound  himself  by  treaty  to  pay  the  debts  for  which 
that  province  had  been  mortgaged  to  British  subjects.  But,  without  such 
express  stipulation,  Silesia  would  still  have  remained  subject  to  the  mort 
gage,  for  he  could  conquer  no  rights  but  such  as  were  vested  in  the  enemy. 

If  this  doctrine  be  true,  it  will  hardly  be  denied  that  the  peaceful  annexa 
tion,  by  legislative  compact,  of  one  nation  to  another,  by  which  the  pledged 
revenues  of  the  one  have  been  transferred  to  the  other,  must  work  a  like 
result,  and  that  the  power  which  takes  such  pledged  revenues  must  take 
them  cum  onere.  While  a  separate  Republic,  Texas  had  contracted  debts 
by  the  issue  of  stock,  bonds,  and  treasury  notes,  for  which  she  had,  in 
various  forms,  pledged  her  revenues  from  customs.  This  fact  was  well 
known  to  Congress,  as  well  at  the  time  of  annexation  as  at  the  period  of  pass 
ing  the  Texas  "Boundary  Law."  On  the  former  occasion,  by  the  articles 
of  annexation,  it  was  provided  that  Texas  should  retain  all  the  vacant  and 
unappropriated  lands  lying  within  her  limits,  to  be  applied  to  the  payment 
of  her  debts  and  liabilities,  which  in  no  event  were  to  become  a  charge 
upon  the  Government  of  the  United  States.  Under  this  provision,  Texas 
has  bound  herself  to  the  United  States  to  pay  her  liabilities  from  the  pro 
ceeds  of  her  public  lands,  and  is  estopped  from  asking  the  United  States  to 
assume  these  liabilities.  But  to  these  articles  of  annexation,  the  creditors  of 
Texas  were  no  parties ;  and  while  they  may  well  demand  of  Texas  the  pay 
ment  of  their  securities  according  to  their  tenor  and  form,  they  are  not 
estopped  from  saying  to  the  Government  of  the  United  States  that,  as  Texas 
does  not  pay  these  securities,  and  as  the  United  States  have  possessed 
themselves  of  a  portion  of  the  resources  which  were  pledged  to  give  value 


314  APPENDIX. 

and  credit  to  them,  the  United  States  should  make  them  equitable  compen 
sation  for  the  diversion  of  these  resources  from  the  purposes  to  which  they 
were  so  pledged.  This  view  seems  to  have  been  taken  by  Congress  in  the 
passage  of  the  Texas  "  Boundary  Bill."  It  is  provided  in  that  bill  that,  in 
consideration  of  certain  concessions  of  Texas,  the  United  States  "  shall 
pay  to  the  State  of  Texas  ten  millions  of  dollars,  in  a  stock  bearing  five 
per  cent,  interest,  and  redeemable  at  the  end  of  fourteen  years,  the 
interest  payable  half  yearly  at  the  treasury  of  the  United  States."  But  it 
is  also  provided  that  "  no  more  than  five  millions  of  said  stock  shall  be 
issued  until  the  creditors  of  the  State  holding  bonds  and  other  certificates 
of  stock  of  Texas,  for  which  duties  on  imposts  were  specially  pledged,  shall 
first  file  at  the  treasury  of  the  United  States  releases  of  all  claims  against 
the  United  States  for  or  on  account  of  said  bonds  or  certificates,  in  such 
form  as  shall  be  prescribed  by  the  Secretary  of  the  Treasury,  and  approved 
by  the  President  of  the  United  States."  This  last  provision  shows  that 
Congress  designed  to  secure  a  settlement  by  Texas  with  such  of  her  credit 
ors  as  held  evidences  of  her  debt  to  them,  secured  by  a  pledge  of  the  duties 
on  imports,  and  that  the  reserved  five  millions  were  not  to  be  paid  to  Texas 
until  she  had  effected  such  settlement,  and  thus  relieve  the  United  States 
from  the  equitable  demand  which  these  creditors  might  have  against  the 
latter  government.  The  proceedings  in  Congress  upon  the  passage  of  this 
act  fully  confirm  this  view.  It  appears,  therefore,  that  the  United  States 
have  acknowledged  a  claim  by  these  creditors  upon  them,  and  that,  at  the 
time  of  the  passage  of  the  said  act,  the  claims  of  this  character  were  esti 
mated  not  to  exceed  five  millions  of  dollars.  It  has  since  appeared  that, 
besides  the  evidences  of  her  debt  on  the  face  of  which  the  revenues  from 
customs  eo  nomini  were  pledged  for  their  payment,  there  are  other  evi 
dences  of  Texan  debt,  in  regard  to  which  the  same  pledge  was  given,  though 
not  in  the  same  form. 

By  the  act  of  7th  June,  1837,  the  Republic  of  Texas  pledged  her  public 
faith,  and  "  so  much  of  the  revenues  arising  from  imports,  &c.,  as  may  be 
necessary  to  meet  the  annual  interest  of  the  funded  debt."  The  loan 
effected  under  this  act,  with  interest,  was,  on  the  1st  of  July,  1850, 
$1,651,590  02.  This  class  of  claims  the  President  of  the  United  States 
and  Secretary  of  the  Treasury  consider  as  coming  within  the  terms  of  the 
act  of  Congress  of  1850,  since  a  pledge  for  the  perpetual  payment  of  inte 
rest  is  in  effect  a  pledge  for  the  payment  of  principal  also. 

Other  loans  were  made  and  debts  contracted  by  Texas,  to  which  the  same 
pledge  applies  by  virtue  of  the  fifteenth  section  of  the  Texan  law  of  14th 
January,  1840.  This  provides  "  that  for  the  redemption  of  all  loans  nego 
tiated  by  the  authority  of  Texas,  independently  of  the  reservation  of  the 
sinking  fund,  the  sales  of  the  public  lands,  its  revenues,  and  public  faith 


APPENDIX.  315 

are  solemnly  pledged."  This  general  pledge  of  "  the  revenues"  of  Texas 
includes  a  special  pledge  of  the  duties  on  imports.  Its  effect  is  precisely 
the  same  as  if  all  the  sources  of  revenue  were  separately  designated ;  since, 
if  this  were  not  the  case,  the  general  pledge  of  its  revenues  would  be  a 
pledge  of  no  single  item  of  revenue,  and  therefore  no  pledge  of  anything 
at  all. 

Other  debts  were  created  under  authority  of  an  act  of  5th  July,  1840, 
the  third  section  of  which  provides  that  the  bonds  before  referred  to  shall 
be  at  all  times  receivable  by  any  collector  of  revenue,  or  at  the  Treasury 
Department,  in  payment  of  any  debt  to  the  government,  or  any  duties  by 
imports  or  direct  taxation  for  the  amount  and  value  of  such  funds,  and  the 
interest  which  may  have  accrued  thereon. 

This  pledge  is  evidenced  on  the  face  of  the  issues  under  this  act,  the 
words  receivable  for  all  government  dues  being  conspicuously  printed  upon 
them.  This  quality  of  being  receivable  for  all  public  dues,  duties  on  imports 
included,  seems  to  the  committee  to  be  in  effect  a  pledge  of  duties  on  im 
ports  for  their  payment.  Under  this  construction,  which  the  President  and 
Secretary  of  the  Treasury  have  adopted  (and  as  the  committee  think  pro 
perly  adopted),  the  amount  of  Texas  debt  for  which  the  holders  have  such 
an  equitable  demand,  as  the  committee  have  before  stated,  against  the 
United  States,  considerably  exceeds  the  sum  of  five  millions.  The  exact 
amount  has  not  as  yet  been  ascertained  by  the  committee,  but  it  is  believed 
that  the  whole,  principal  and  interest,  exceeds  eight  millions  of  dollars. 

It  is  understood  that  no  part  of  this  debt,  principal  or  interest,  has  been 
paid  by  Texas;  neither  the  proceeds  of  her  public  lands,  according  to  the 
articles  of  annexation,  nor  the  duties  from  imports,  having  been  in  any 
manner  applied  to  this  purpose.  Nor  has  Texas  effected  any  settlement 
with  these  creditors  whereby  the  United  States  have  been  released  from 
these  claims,  though  nearly  two  years  have  elapsed  since  the  passage  of  the 
act  of  Congress  of  1850,  and  more  than  eighteen  months  since  the  accept 
ance  of  that  act  by  Texas. 

By  an  act  passed  on  the  31st  of  January,  1852,  the  State  of  Texas  has 
declared  its  willingness  to  settle  with  these  creditors,  not  according  to  the 
terms  of  their  contracts,  and  the  tenor  of  the  evidences  of  debt  held  by  them, 
except  in  a  few  instances,  but  at  certain  rates,  varying  from  seventy  to 
twenty  per  centum. 

The  second  section  of  this  act  provides  that  payment  at  these  reduced 
rates  shall  not  be  made  until  "  the  Governor  of  this  State  shall  be  notified 
by  the  President  of  the  United  States  that  the  Secretary  of  the  Treasury  of 
the  United  States  has  been  required  by  law  to  issue  to  the  State  of  Texas 
the  five  millions  of  dollars  of  stock  withheld  under  the  provisions  of  said 
act,  approved  9th  September,  1850,  until  certain  creditors  shall  have  filed 


316  APPENDIX. 

releases  at  the  Treasury  of  the  United  States  as  therein  required,  or  that 
said  Secretary  has  been  required  by  law  to  issue  to  the  said  State  of  Texas 
sums  of  said  stock  equal  to  the  sums  for  which  the  State  may  at  any  time 
present  the  required  releases  from  any  portion  of  said  creditors  at  the 
Treasury  of  the  United  States,  after  which  notice,  such  claim  or  claims 
shall  be  paid,  as  provided  for  in  other  cases,"  &c. 

This  provision  is  wholly  unsatisfactory  to  the  most  of  the  creditors  hold 
ing  these  debts,  though  it  would  doubtless  be  accepted  by  the  comparatively 
few  whose  claims  are  scaled  at  the  rate  of  seventy  per  cent. 

The  committee  do  not  think  that  it  would  become  the  United  States,  by 
the  passage  of  such  a  law  as  is  contemplated  in  the  above  cited  act,  to  unite 
with  Texas  in  the  effort  to  compel  her  creditors  to  submit  to  the  arbitrary 
reduction  of  these  claims  which  Texas  proposes.  And  inasmuch  as  no  portion 
of  these  claims  has  been  paid  by  Texas  since  the  date  of  annexation,  nor 
any  satisfactory  arrangement  made  or  proposed  for  their  liquidation  and  the 
release  of  the  United  States  since  the  passage  of  the  "  Boundary  Bill,"  the 
committee  think  that  the  Government  of  the  United  States  should  protect 
itself  from  these  demands,  increasing  as  they  are,  for  the  most  part,  at  the 
rate  of  ten  per  cent,  per  annum,  and  relieve  the  necessities  of  these  creditors, 
to  many  of  whom  longer  delay  must  prove  entirely  ruinous,  by  the  passage 
of  some  act  which  shall  at  the  same  time  satisfy  the  creditors,  relieve  the 
United  States  from  further  demands  by  them,  and  meet  the  claim  of  Texas 
for  the  reserved  five  millions. 

This  they  think  may  be  effected  by  issuing  to  the  said  creditors  stock  of 
the  United  States  to  the  amount  of  $8,555,000,  bearing  an  interest  of  five 
per  cent,  per  annum,  redeemable  at  the  pleasure  of  the  Government  of  the 

United  States  after years,  and  taking  from  the  creditors  their  receipts 

in  full  and  assignments  of  their  evidences  of  debts,  which  may  be  held  by 
the  United  States  as  a  set-off  to  the  claim  of  Texas  to  the  five  millions  re 
served  under  the  act  of  September  — ,  1850. 

This  arrangement,  it  is  believed,  would  be  perfectly  satisfactory  to  the 
creditors  of  Texas,  entirely  equitable  on  the  part  of  the  United  States,  and 
defensible  as  regards  the  State  of  Texas,  while  at  the  same  time  such  provi 
sions  may  be  adopted  as  in  the  end  will  make  this  arrangement  no  more 
burdensome  to  the  National  Treasury  than  if  the  reserved  five  millions  were 
applied  to  these  claims  or  paid  to  Texas. 


APPENDIX.  317 

W. 

DEBTS  OF  THE  REPUBLIC  AND  DEBTS  OF  THE  STATE. 

After  the  note  to  Chapter  XXX.  was  in  the  hands  of  the  printer,  we,  for 
the  first  time,  saw  a  communication  on  this  subject  in  the  Washington 
Union  of  March  13,  1852,  so  much  of  which  as  our  typographical  arrange 
ments  will  admit  of,  we  shall  now  give  to  the  reader. 

Adverting  to  the  assumption  made  by  some,  that "  the  final  decree  of 
Texas,  as  to  the  amount  and  character  of  the  Texas  debt,  is  binding  upon 
the  United  States  Government,"  the  writer  says — 

"  If  this  be  the  legal  and  constitutional  construction  of  the  law  of  the  9th 
of  September,  1850,  in  which  the  Federal  Government  requires  certain 
holders  of  the  debt  to  release  her,  as  a  condition  precedent  to  her  paying 
Texas  a  given  sum  of  money,  the  State  has  a  right  to  certify  that  there  is 
no  debt,  or  that  she  owes  nothing,  and  the  United  States  would  be  bound  by 
it.  The  release  from  the  creditors  required  by  the  law  would  be  full  and 
complete  in  a  law  of  the  State  declaring  that  there  was  no  debt,  and  this 
sovereign  declaration  of  a  sovereign  State  to  another  power  equally  sovereign 
would  exonerate  both  from  all  responsibility  for  the  debt  in  question. 

tf  The  creditors  of  Texas  have  the  right,  nay,  have  been  required,  to  pre 
sent  their  claims  at  the  treasury  in  Washington,  and  in  so  doing  have  noti 
fied  the  Federal  Government  of  the  amount  and  character  of  them.  Fur 
thermore,  the  Secretary  of  the  Treasury,  previous  to  the  passage  of  the  late 
law  enacted  by  the  Texas  Legislature,  had  received  officially  from  the  authori 
ties  of  the  State,  all  the  laws  of  the  late  Republic,  creating  and  authorizing 
the  various  classes  of  debt,  as  well  as  the  amount  and  character  of  it.  These 
laws,  passed  from  1836  to  1840,  'form/  in  the  language  of  the  Secretary, 
1  the  basis  of  the  contract  between  the  present  holders  and  the  State/  and 
from  them  it  is  ascertained  that  the  amount  of  the  debt  is  much  larger  than 
that  certified  by  the  recent  law  of  Texas.  Now,  in  adjusting  this  discre 
pancy,  by  which  law  is  Congress  to  be  governed  ?  by  that  creating  the 
debt,  or  by  that  reducing  or  denying  it  ? 

"  The  cardinal  error  of  those  who  reason  in  this  way  lies  in  the  unquali 
fied  assumption  that,  as  Texas  is  a  sovereign  State,  her  acts,  although  sub 
versive  of  her  own  constitution,  cannot  be  questioned  or  set  aside  by  any 
judicial  proceeding.  This  doctrine  is  admissible  and  true  as  between  her 
and  a  private  citizen,  but  untenable  where  the  Federal  Government  or  an 
other  State  is  the  party  litigant.  The  Constitution  of  the  United  States 
points  out  the  method  of  adjusting  difficulties  of  this  character.  The  ques- 


318  APPENDIX. 

tion  under  discussion  involves  a  case  in  point.  The  Republic  of  Texas,  by 
various  laws  obtained  various  loans,  and  issued  the  evidence  of  such  indebted- 
dess  in  bonds  and  treasury  notes.  When  she  ceased  to  exist  as  a  political 
body,  and  was  merged  into  the  present  State,  the  latter  bound  herself  to  the 
United  States,  in  the  treaty  of  annexation,  to  pay  the  debt  of  the  former 
out  of  the  proceeds  of  the  public  lands.  The  State  also,  in  her  constitution, 
secured  to  the  holders  of  the  obligations  of  the  late  Republic  'all  the  rights' 
which  they  had  against  her  during  her  political  existence.  In  other  words, 
the  State  of  Texas,  when  erected  into  a  member  of  the  Union,  declared,  in 
her  organic  law,  that  the  debt  of  the  Republic  should  be  determined  by  the 
laws  creating  it." 

The  case  appears  to  us  to  be  briefly  this : — 

A  sovereign  State  has,  by  virtue  of  her  sovereignty,  the  right,  i.  e.}  the 
political  power,  to  repudiate  her  debts,  either  wholly  or  in  part,  and  that 
with  or  without  reason. 

But  the  legislature  of  a  State  is  not  The  State.  It  is  a  body  of  limited 
powers,  denned  by  the  constitution  of  the  State,  and,  in  a  certain  sense,  by 
the  Constitution  of  the  United  States.  As  such,  the  legislature  of  a  State 
has  no  right  to  repudiate  contract  debts ;  such  an  act  being  subversive  of 
the  organic  law  to  which  it  owes  its  existence,  and  by  which  its  powers  are 
denned.  If  the  contract  debts  of  a  State  are  repudiated,  it  can  be  only  by 
The  State,  that  is,  by  the  people  of  the  State  in  convention  assembled. 

The  Republic  of  Texas  incurred  certain  debts  for  which  she  pledged  her 
revenue. 

The  State  of  Texas,  that  is,  the  people  of  Texas,  in  convention  assem 
bled,  in  the  articles  of  annexation  which  they  adopted  as  part  of  their  con 
stitution,  assumed  these  debts  as  defined  by  the  Republic. 

The  Legislature  of  Texas  has  no  authority  to  set  aside  or  define  <rby 
municipal  regulations,"  the  debts  thus  assumed  by  the  State  of  Texas. 

Texas  having  failed  to  discharge  these  debts  according  to  her  compact 
with  the  United  States,  the  Federal  Government  becomes  liable  for  them, 
both  according  to  the  principles  of  equity  and  the  laws  of  nations. 

The  Federal  Government  is  liable  for  these  debts,  as  defined  by  the 
Republic  of  Texas,  and  as  assumed  by  the  State  of  Texas,  that  is,  by  the 
people  in  convention  assembled.  The  Legislature  of  Texas,  a  body  of 
limited  powers,  has  no  authority  to  set  aside  the  decisions  of  the  Republic 
of  Texas  and  of  the  State  of  Texas. 

The  doctrine  of  State  rights  cannot,  therefore,  be  invoked  in  defence  of 
the  course  the  Legislature  of  Texas  has  pursued ;  and,  even  if  it  could,  it 
ought  not  to  be.  When  State  legislatures  violate  the  obligations  of  con 
tracts,  State-Rights  men  ought  to  be  foremost  in  denouncing  such  iniquity. 


INDEX. 


PAGE 

ACCOUNTS,  ordinance  respecting  the  settlement  of  .  .24 

Acts,  copies  of  — 

annexation  act     .             .             .             ...             .             .  292 

boundary  act        .......  294 

act  of  Texas  assenting  to  boundary  act               .             .             .  179 

liquidation  act     .......  295 

scaling  act             .......  158 

confirming  award  of  auditor  and  comptroller    .             .             .  202 

Acts,  extracts  from  — 

loan  act  of  December,  1835         .....  25 

treasury-note  act  of  January  7,  1836      ....  27 

establishing  General  Land-Office            .            .  57 

for  augmenting  navy       ......  70 

making  appropriations  for  navy  .  .  .      . 

for  more  certain  operation  of  sinking  fund         .             .             .  100 

for  issuing  treasury  bonds,  February  5,  1840     .             .             .  100 


for  funding  promissory  notes,  February  5,  1840  .  .         101 

ublic  recognizances  payable  in  gold  an 
rescinding  interest  on  public  debts  after  July  1,  1850  .  .         168 


making  public  recognizances  payable  in  gold  and  silver  .         123 


imposing  duties  on  imports,  December  20,  1836  .  .         218 

to  raise  revenue  by  direct  taxation,  June  12,  1837         .  .         218 

to  consolidate  public  debt,  June  7,  1837  .  .  .         219 

authorizing  issue  of  promissory  notes,  June  9,  1837     .  .         219 

to  authorize  five  million  loan        .....         220 

for  more  certain  operation  of  sinking  fund         .  .  .         221 

creating  funds  for  support  of  government,  1840  .  .        222 

for  funding  the  liabilities  of  government,  1840  .  .         223 

repealing  act  to  provide  for  redemption  of  treasury  notes         .         223 
to  authorize  issue  of  exchequer  bill        ....         224 

to  regulate  collection  of  import  duties    ....         224 

granting  McKinney  and  Williams  power  to  issue  circulating 

notes     ........         231 

prohibiting  paper-money  issues  ....         233 

Agricultural  and  Commercial  Bank,  recognized  by  Government  of 

Texas    ........          59 

proceedings  under  its  charter     ....     231,  234,  235 

Agricultural  statistics  of  Texas  .....         291 

Annexation,  resolution  of,  passed  by  Congress  .  .  .130 

assented  to  by  Texas       .  .  .  .  .  .131 

good  effects  of     .  .  .  .  .  .  146,  251 

copy  of  resolution  ......         292 

pledges  of  faith  therein  violated  by  Texas         .  .  .        226 


320  INDEX. 

PAGE 

Archer,  Mr.  Branch  Tanner,  extracts  from  his  address  to  General 

Consultation     .......  19 

Army,  ordinances  respecting     .....          23,  55,  93 

Assessments  in  Texas,  tabular  view  of             ....  289 

Assignees  of  public  debts,  their  cases  in  some  instances  harder  than 

those  of  original  claimants      .....  200 

Audited  accounts  should  not  be  reopened         .  .  .  .  ix.  268 

Audited  claims  made  exchangeable  for  land-script,  February,  1850    .  168 

Audited  drafts  made  receivable  for  land  dues  ....  25 

amounts  issued     .......  267 

final  disposition  of  them .             .....  268 

violations  of  faith  in  respect  to  them      ....  218 

Auditor  and  comptroller,   extracts  from  their  report  of  November, 

1851,  and  remarks  on  the  same           ....  191 

act  passed  confirming  their  scaling  award          .            .             .  202 

copy  of  their  report  of  November,  1851              .            .            .  304 

Bank  of  Agriculture  and  Commerce  (see  Agricultural  and  Commer 
cial  Bank)         .......          59 

other  bank  prospects        ......  66 

Bank-notes,  influx  of  from  the  United  States  in  1835-37         .  .        228 

their  issue  prohibited  by  constitution  and  laws  of  Texas          .     232-3 

Banking  by  government,  the  worst  form  of  banking   ...  99 

Bank  stocks,  prices  of  in  Philadelphia,  1842,  1845,  and  1852  .         261 

Banks,  efforts  to  alter  constitutional  provisions  respecting     .  .         238 

"Barring"  debts  of  the  Republic,  act  for,  its  character  .  .         225 

Bell,  Governor,  his  views  of  the  obligations  of  public  debt,  .          x 

extracts  from  and  comments  on  his  message  of  November,  1851      191 

vetoes  liquidation  act       ......         203 

further  extracts  from  his  message  of  1851          .  .  249,251 

Benton,  Mr.,  makes  the  initiative  motion  in  the  Senate  respecting 

affairs  of  Texas  ......         171 

Bonds  of  United  States,  sale  to  the  amount  of  $1,000,000  ordered  by 

Texas    ........        206 

Borden,  Mr.  Gail,  his  payments  into  the  treasury        .  .  .18,  62 

Boundary  act,  passed  by  Congress  of  United  States     .  .  .         178 

assented  to  by  Texas       ......         179 

copy  of  boundary  act       ......         294 

violated  by  Texas  .  .  .  .  .  .226 

Bourgeois,  Mr.,  preliminaries  of  a  loan  from  him         .  .  .         119 

the  loan  defeated  ......         123 

Bullock,  Mr.,  and  his  pigs 109-112 

Burnet,  President,  extracts  from  his  message  ....     50-51 
Butler,  Mr.,  of  South  Carolina,  his  remarks  in  United  States  Senate, 

August  26,  1852  .  .  .        '.,».-•        .  .        212 

Chalmers,  Mr.,  recommends  that  the  debts  be  funded  in  a  stock  bear 
ing  two  and  a  half  per  cent,  interest               .             .             .  113 
Chenoweth,  Mr.,  regards  the  debt  as  beneficial            ...  56 
Circulating  paper,  gross  amount  of                    .             .             .             .  230 
Civil  list,  moderate  allowance  for                       .             .             .             .27 

allowance  greatly  increased        .....  55 

Clay,  Mr.,  his  motion  in  the  Senate       .....  172 

extracts  from  his  speech               .....  172 

Cochran,  Mr.  James,  "  advances  several  hundred  dollars"      .             .  18 

Comptroller,  see  Auditor  and  Comptroller,       .... 

Congress  of  Texas,  first,  proceedings  under  first  session          .             .  54 

"                "                second  session           .            .  62 


INDEX.  321 

PAGE 

Congress  of  Texas,  second  proceedings  under  called  session  .  .  68 

"  "  first  regular  session    .  .  71 

"  second  session  .  .  77 

third,  meets  November  5,  1838       ...  82 


fourth 


November  11,  1839 


fifth  November  2,  1840       .  .  .104 

sixth  November,  1841          .  .  .116 

"  June,  1842  (special  session)  .        118 

seventh         November,  1842  .  .  .        120 

eighth  December,  1843  .  .  .123 

ninth  December,  1844  .  .  .126 

"  June,  1845  (special  session)  .  .        130 

Congress  of  United  States  (see  United  States) 

Consolidated  Fund  of  1837,  act  passed  for  establishing  .  .          65 

remarks  on  as  scaled       ......        193 

breaches  of  faith  respecting        .....         219 

Constitution  of  State  of  Texas,  provisions  in  it  respecting  public  debt 
and  government  paper  money  .... 

respecting  obligation  of  contracts  ....         167 

respecting  banking  and  paper  money     ....         232 

Consultation,  The  General,  meets  October  16,  1835     ...          17 
proceedings  under  it  .  .  .  .  .    17,  22 

Continental  money  ;  comparison  of  it  and  Texas  paper  money          .         135 
its  having  been  scaled  by  the  United  States  no  justification  of 

Texas 244 

Corwin,  Mr.,  Secretary  of  the  Treasury  of  the  United  States  ;  his  re 
port  on  the  debts  of  Texas      .  .  .  .298 

Creditors  of  Texas,  divided  into  two  parties     ....        205 

diversified  action  of         ......        207 

present  condition  of        ......        215 

Currency  in  Texas,  general  view  of  .  .  .  .         227 

Customs,  amounts  received  in  different  years  .  .  .         271 

amounts  received  at  different  ports,  1843-44    .  .  .        278 

synopsis  of  acts  respecting         .....        282 

Dawson,  Schott,  and  Whitney ;  remarks  on  their  case  .  .        197 

Debt,  public,  a  public  evil         ......         viii 

Debt  of  Texas,  its  small  amount,  Sept.  1836    .  52 

Sept.  1837    ....          73 

Debt,  payable,  of  Texas,  tabular  view  of          .  .  .  .        204 

Debt,  suspended        "  ...        206 

Debts  of  the  Republic  and  debts  of  the  State,  distinction  between     216,  317 

Debt  of  Texas  at  different  periods,  tabular  view  of      .  .  .        275 

First  class   ...  .  .  .  .  .305 

Second  class         .......        310 

Third  class  .  .  .  .  .310 

Direct  taxes,  amount  received  in  different  years          .  .  .271 

Dues  on  land,  collectors  appointed        .....  24 

Dues,  public,  synopsis  of  tenders  of     .  .  .  .  .        284 

Eight  per  cent,  funded  debt  of  1840,  authorized          .            .            .  101 

remarks  on  as  scaled       ......  194 

violations  of  faith  respecting     .....  223 

hard  case  of  holders  of  .              .             .            .             .             .  264 

England,  government  of,  rates  at  which  it  has  borrowed         .             .  149 

Equation  of  currencies  proper  in  settling  non-audited  accounts          .  254 

Erwin,  Mr.,  loan  from   .......  53 

21 


322  INDEX. 

PAGE 

Exchequer  bills  issued  .......  116 

ordered  to  be  received  at  only  their  market  value        .            .  118 
depreciation  of    .             .             .             .             .             .              117-119 

small  denominations  issued         .....  122 

their  continued  depreciation       .                          .             .             .  124 

their  further  issue  prohibited     .....  129 

violations  of  faith  in  respect  to  them     ....  224 

did  not  become  a  general  currency         ....  230 

table  of  amounts  issued  ......  279 

their  rates  of  value,  1843-44      .....  279 

"  ^   1844-45 280 

English,  amounts  issued              .....  144 

not  paid  in  for  duties       ......  144 

Expenditures  of  State  of  Texas             .....  286 

Exports  of  Texas,  1838  to  1845,  tabular  views  of                    .            .  277-8 

Finance  Committee,  first  report  of  .  .  .  .31 

their  plan  for  raising  revenue  .  .  .  .32 

Fiscal  policy  of  Texas,  general  view  of  ....         135 

Five  million  loan  authorized      ......  57 

act  to  authorize  modified  .....  80 

violations  of  faith  respecting  .....  220 

Funded  debt  of  1840,  violations  of  faith  in  regard  to  it  .  .  223 

hard  case  of  holders  of  .  .  .  .  .  .  264 

Funding  of  public  debt,  act  to  authorize,  June  7,  1837  .  .  65 

stock  books  again  opened  .  .  .  .94 

act  of  1840,  summary  of .  .  .  .  ,    .         101 

repealed  Feb.  1841  .  106 

Galveston  town-plot,  sale  of  .  .  .  .  .56 

General  Consultation,  The,  proceedings  under  ...  17 

Government  bank  proposed  by  President  Lamar         ...  87 

Government  banking  the  worst  form  of  banking  ...  90 

Government  ad  interim,  proceedings  under       ....  49 

Government,  Provisional,  legislative  proceedings  under          .  .  23 

executive  .  .  .29,  42 

in  relation  to  public  lands  .....  37 

extract  from  its  declaration         .....  217-18 

Greene,  Gen.  Thos.  J.,  mortgages  his  property  in  the  United  States 

for  the  benefit  of  Texas  .....          55 

Great  Britain,  rates  at  which  it  has  negotiated  loans  .  .  .         149 

amount  of  exchequer  bills  issued  ....         144 

does  not  suffer  them  to  be  paid  in  for  duties      .  .  .         144 

Hall,  Capt.,  brings  donations  from  citizens  of  New  Orleans  .             .  21 
Hamilton,  Gen.  J.,  his  letter  announcing  that  a  loan  had  been  ef 
fected    107 

extract  of  his  letter  from  London,  May  18,  1841            .             .  109 

his  efforts  defeated  by  proceedings  at  Austin    .  .  110-112 

"Hammered  dollars"  a  currency  in  Texas         ....  227 

Hard  money  policy  commences  January,  1844              .             .             .  123 

Hard  money  laws  of  Texas,  their  good  effects             .             .             .  236 

Hardships  of  old  soldiers  and  civil  officers         ...»  164 
Henderson,  Lieut.-Governor,  extracts  from  his  communication  to  the 

legislature,  1851           ......  250 

Holford,  James,  debt  due  to  him           .....  199 

Holly  Springs,  bank  of,  circulation  of  its  notes  in  Texas         .            .  235 


INDEX.  323 

PAGE 

Houston,  Gen.  Samuel,  installed  as  President              ...  54 

vetoes  act  to  open  land-offices      .....  58 

stops  the  sale  of  land-script  at  New  Orleans  and  Mobile          .  64 

his  message  of  June  6,  1837        .....  67 

extract  from  his  message  of  December  21,  1837             .             .  72 

opposes  unsuccessfully  a  new  issue  of  treasury-notes  .             .  79 

his  second  term  commences,  December,  1841    .             .             .  116 

extracts  from  his  address  to  seventh  congress    .             .             .  120-1 

his  account  of  archives  insurrection       ....  121 

denounces  repudiation     ......  123 

comparison  of  expenditures  in  his  second  term  with  those  un 
der  his  predecessor       ......  126 

idem  of  imports  and  exports,      .....  128 

his  remarks  in  United  States  Senate,  August  17,  1852  208,  211 

Hutchins,  Mr.,  of  Natchez,  his  donation  to  Texas        ...  32 

Imports,  tabular  views  of           ......  277-8 

acts  respecting  duties  on             ....          24,  56,  73 

synopsis  of  acts  respecting  duties  on     .            .            .            .  282 

Interest  on  all  liabilities  of  Republic  stopped  after  July  1,  1850         .  168 

the  injustice  of  this  act    ......  201 

the  act  a  breach  of  faith  ......  225 

Interest  on  private   debts,  the  laws  of  Texas  concerning,  and  the 

good  effects  thereof      ......  240 

Jaudon,  Mr.  Samuel,  ex-cashier  of  United  States  Bank,  intended  to 

be  President  of  National  Bank  of  Texas  .  .  .  108 

Jones,  President  Anson,  his  sound  views  of  public  debt  and  paper- 
issues  ........  129 

Kauffman,  Mr.,  speaker  of  the  fifth  Congress,  extracts  from  his  re 
marks  104,106 

Lamar,  Mirabeau  B.,  installed  as  President     ....          87 

his  first  message  ......          87 

proposes  a  Government  Bank      .....     87-90 

extracts  from  his  message  to  Fourth  Congress  ...  98 

condition  of  affairs  at  close  of  his  administration  .  .  102 

Land,  grants  to  soldiers  and  settlers     .  .  .22,  27,  28,  75,  93 

amount  held  by  individuals        ....  132,  254 

"       in  cultivation      ......         254 

"       owned  by  State  of  Texas  .  .  .  132,  281 

overrated  as  a  fiscal  resource       .....        134 

cession  of  to  United  States  recommended  .  .  146,  156,  161 

recommendation  to  pay  public  creditors  with  .  .  .  161 

Land-dues,  amount  received  in  different  years  .  .  .         271 

Land-offices,  closed  by  Provisional  Government  ...  22 

act  for  opening  of  them  ......  57 

opening  of  them  postponed          .....  68 

new  act  for  opening  of  them  .....  71 

Land-office  archives,  insurgents  take  possession  of  .  .         121 

Land-office,  General,  act  for  establishing  ....  57 

commissioner  of,  his  report  to  November  1,  1838  .  .  82 

November,  1845  .  .  131 

November,  1851  .  .  280 

Land-script,  unreasonable  expectations  from  the  sale  of          .  75,  140 

the  whole  amount  sold    ......         280 

audited  claims  exchangeable  for  ....  168 


324 


INDEX. 


Land  speculations  in  Texas,  remarks  on 

their  extent          ...... 

Land  speculators'  rebellion         . 

Land  titles  in  Texas,  difficulties  respecting 

Legislature  of  State  of  Texas,  the  first  meets  February,  1846 

the  second  meets  December,  1847 

the  third  meets  November,  1849  .  .  . 

the  fourth  meets  November,  1850 

the  fourth  meets  November,  1851  .  .  . 

License  taxes,  amount  received  in  different  years 
Liquidation  act  passed  ...... 

copy  of  it  .  .  .  .  .  . 

Loan  acts,  to  borrow  $100,000   . 
1,000,000 

"  "         $20,000     . 

"      ^  $5,000,000  .  .  .    . 

the  last  modified  . 

another  act  for  $1,000,000          . 
Loan  agents  sent  to  United  States  to  negotiate 

rumors  of  their  success  . 

agents  sent  to  Europe      . 
Loans  effected,  from  Mr.  Brookfield      . 

Mr.  Triplett  and  others   . 

Mr.  Erwin  and  others      . 

Pennsylvania  Bank  of  United  States 

joy  produced  by  prospect  of  a  loan  in  Europe    . 

illusions  respecting  . 


PAGE 

253 

254 

37-41 

170 

146 

156 

161 

179 

181 

271 

203 

295 

25 

25 

57 

57 

80 

94 

21 

42 

96 

36 

53 

53 

98 

96-98 
140 

27 


Marque  and  reprisal,  letters  of,  granted  .... 

Mason,  Mr.,  of  Virginia,  his  motion  and  remarks  in  United  States 

Senate,  August  26,  1852          .....  208 

Mexico,  the  Texans  threaten  to  invade  it          ....  105 

McKinney  and  Williams  offer  to  advance  money  to  Texas      .            .  20 

authorized  to  issue  circulating  notes      ....  231 

Military  operations,  glances  at              ....          18,  19,  49 

1 '  Mills'  money"  .  .  .  .  .  235 
Mobile,  complaints  respecting  agency  at  .  .  .76 
Mr.  Moore,  of  Pennsylvania,  his  remarks  in  United  States  House  of 

Representatives,  on  Texas's  claim  to  part  of  New  Mexico    .  177 

Nacogdoches  Land  Speculators,  troubles  with             .            .            .  38-41 

National  Bank,  recommended  by  President  Lamar  ...  87 

plan  of,  prepared  by  Mr.  J.  Horseley  Palmer  .  .  .  108 

Navy,  ordinance  to  establish     ......  23 

two  vessels  procured        ......  42 

deplorable  condition  of    .  .  .  .  .  .54 

act  to  increase       .......  6B 

President  Houston  calls  attention  to  its  inefficiency     .            .  -Q3 

act  to  augment  it              ......  ft) 

gloomy  report  on              ......  73 

totally  destroyed              ......  93 

steamship  "  Zavalla"  purchased              ....  93 

other  vessels  procured  from  Dawson,  Schott,  and  Whitney  .  93 

appropriations  for  navy  .....  93 

New  Orleans,  contributions  from  citizens  of  .  .  .  .21 

agency  at,  complaints  of  .  .  .  76 

Northern  Bank  of  Mississippi,  circulation  of  its  notes  in  Texas          .  235 


INDEX.  325 

PAGE 

Ohio  bank-law,  said  to  be  means  of  establishing  a  bank  in  Texas       .  234 

Paper-money  disease,  hereditary  in  Americans 

Paper-money  issues  prohibited  by  Constitution  and  laws  of  State 

of  Texas 131,232-3 

how  these  laws  are  evaded          .....  235 

Paper-money  panic  in  Texas     ......  236 

Pearce,  Mr.,  of  Maryland,  introduces  the  "Boundary  Bill"  in  the 

United  States  Senate  ......  ^174 

extracts  from  his  speech              .....  174-7 

makes  report  to  Senate  on  debt  of  Texas,  August  17,  1852       .  207 
his  speech  in  the  Senate,  August  26,  1852         .            .            .209-11 

copy  of  his  report             ......  312 

Pratt,  Mr.,  of  Maryland,  his  remarks  in  Senate,  August  26,  1832       .  212-14 

Promissory  notes,  amount  issued           .....  268 

(see  treasury  notes.) 

Provisional  Government,  proceedings  under     ....  23-48 

extract  from  its  declaration         .  218 

Public  debt  a  public  evil             .                          .             .             •             •  viii 

Public  dues  on  land,  collectors  appointed         ....  25 

amount  collected  in  different  years         .  .  .  .271 

Public  tenders,  frequent  changes  of                   .             .             .             .  142 

synopsis  of  changes  of     .             .             .             .             .             .  284 

"  Red  backs."     See  treasury  notes. 

Revenue,  estimate  of      .            .            .             .            .             .            .  98-99 

Revenue  laws  of  Texas,  synopsis  of                   .            .            .            .  282 

Revenue  system  of  Texas,  frequent  changes  in             ...  141 

Revenue  of  the  Republic,  tabular  view  of         ....  270-2 

in  what  kind  of  funds  received    .....  273 

Revenue  of  the  State,  tabular  view  of    .....  286 

Robinson,  J.  W.,  made  Lieutenant-Governor   ....  21 

made  acting  Governor     ......  48 

Royal,  Mr.  R.  R.,  President  of  Council             ....  17 

advances  money  to  Texas            .....  18 

Saligny,  Mr.  de,  Minister  from  France,  his  difficulties  with  the  Texan 

Government      ......  109-112 

Santa  Anna  captured  by  the  Texans      .  .  .  .  .49 

Scaling  of  the  interest  of  the  debt  proposed  by  Mr.  Chalmers              .  113 
of  principal  recommended  to  first  Legislature  by  Committee  of 

House   ........  146 

and  also  by  Committee  of  Senate            ....  153 

act  passed  March  20,  1848           .....  158 

copy  of  act             .......  158 

difficulty  in  applying  its  principles         ....  199 

the  act  a  breach  of  faith  ......  225 

examination  of  popular  arguments  in  favor  of  .             .             .  255 
Schott  and  Whitney,  extracts  from  their  letter  to  the  Governor-of 

Texas 198 

Sedgwick,  Mr.,  of  Massachusetts,  his  view  of  contract  debts  .            .  ix 

"  Shin-plasters,"  a  currency  in  Texas  .....  228 

Sinking  Fund  established           ......  94 

act  to  strengthen  it           ......  100 

Smith,  Henry,  elected  Governor             .....  21 

objects  to  management  of  money  matters           ...  33 

hates  the  Nacogdoches  land  speculators            .                         .  40 


326  INDEX. 

PAGE 

Smith,  Henry,  quarrels  with  the  Council           ....  43-48 

made  Secretary  of  the  Treasury               ....  64 

reports  a  plan  of  revenue  and  finance     ....  64 

postpones  operation  of  funding;  act          ....  68-71 

first  forbids  and  then  allows  the  receipt  of  treasury  notes  for 

public  dues        .......  71 

complains  of  agencies  at  New  Orleans  and  Mobile        .             .  76 

recommends  funding  of  treasury  notes  .             .             .             .  85 

his  estimates  of  revenue               .....  86 

his  report  of  November  3,  1838  .....  88 

Soldier,  old,  speech  of,  at  Austin           .....  166 

Solemn  League  and  Covenant  of  the  Texans     ....  218 

State  of  Texas,  constitution  of,  adopted             ....  145 

government  of,  ad  interim,            .....  146 

money  received  from  United  States  applied  to  current  expenses  206 

State  stocks,  prices  of  at  New  York,  1842,  1845,  and  1852       .            .  260 

Stocks,  prices  of  at  Philadelphia,  1842, 1845,  and  1852            .            .  261 

Steele,  Mr.,  arraigned  for  contumacy    .....  37 

Suspended  debt,  table  of           ...  206 

Taxes,  internal,  synopsis  of  acts  respecting     ....  288 

amount  collected  in  different  years          ....  271 
assessment  of  by  the  State  of  Texas      .            .            .            .289 

Tenders,  public,  frequent  changes  of    .            .            .            .            .  141 

synopsis  of           .......  284 

Ten  per  cent.  Fund  of  1840,  authorized  .  .  .  .101 

remarks  on  as  scaled       ......  193 

violations  of  faith  respecting      .....  223 

hard  fate  of  holders  of    .             .             .             .             .             .  264 

Ten  per  cent,  stock  of  1837,  authorized            ....  65 

remarks  on  as  scaled       ......  193 

violations  of  faith  respecting       .....  219 

Texans,  their  erroneous  views  of  public  debt  examined  .  243,  254 

unreasonable  pretensions  of  their  public  men                .             .  252 

Texas,  her  fiscal  history  interesting       .....  v 

her  example  may  be  productive  of  evil  .             .             .            .  xi 

her  area  as  compared  with  other  countries         ...  49 
her  area,  as  stated  by  Committee  of  her  General  Land-Office    131,  280 

her  motives  weakened  for  keeping  faith  with  her  creditors       .  163 

her  claims  to  half  of  New  Mexico  unreasonable             .             .  177 

her  pledges  of  faith  and  breaches  of  faith         .             .             .  217 
comparison  of  her  action  with  that  of  the  United  States  and 

the  other  States            ......  240 

her  present  condition       ......  249 

her  past  condition            ......  251 

has  received  "  sufficient  consideration"              .             .             .  250 

her  interest  would  be  promoted  by  repealing  her  scaling  acts  268 

Toby,  Mr.  Thomas,  agent  at  New  Orleans         .    .         .             .             .  56,  64 

Town  lots,,  amount  received  from  sale  of          ....  272 

Treasurer  appointed       .......  31 

Treasury  bonds,  issue  of  authorized      .....  100 

remarks  on  as  scaled       ......  196 

violations  of  faith  respecting      .....  222 

Treasury  notes,  issue  of  authorized  January  7,  1836                .            .  27 
act  for  issue  of  $500,000             .                         .            .            .65 

issues  commence  November  1,  1837        ....  71 

for  issue  of  $100,000  additional              ....  73 


INDEX.  327 

PAGE 

Treasury  change  notes  authorized         .....  75 

notes,  why  for  a  time  at  par  with  silver              ...  77 

additional  issues  authorized  May  18,  1838         .            .  77,  80 

no  longer  received  for  public  dues           ....  116 

difficulty  of  keeping  such  notes  at  par  .  .  124,  143 

remarks  on  as  scaled       ......  193 

violations  of  public  faith  respecting       .  .  .  219,  223 

evils  of  as  a  currency      ......  229 

amounts  issued    .......  268 

"         in  circulation  at  different  periods         .             .             .  269 

final  disposition  of           ......  269 

rate  of  scaling  of  ......  269 

Triple tt,  Mr.,  loan  from             ......  53 

United  States  acknowledge  independence  of  Texas     ...  62 

pass  resolution  of  annexation     .....  130 

rates  at  which  they  have  negotiated  loans          .             .             .  150 

pass  "  Boundary  Act"      ......  178 

controversy  with  Texas  respecting  the  same      .             .             .  180 

proceedings  in  Congress,  August,  1852  ....  207 

United  States  Bank  note,  proceedings  in  relation  to     .             .  32 

United  States  bank,  loan  obtained  from             ....  98,  105 

scaled  by  auditor  and  comptroller          ....  196 

Vicksburg,  loan  from  the  Commercial  and  Railroad  Bank  of,  frus 
trated    ........  95 

War,  Secretary  of,  his  reasons  for  not  issuing  land  warrants  to  sol 
diers     ........  70 

his  report  on  fraudulent  land  claims       ....  82 

White,  Mr.  David,  agent  at  Mobile        .             .             .             .             .  56,  64 

Wood,  Gov.,  recommends  scaling  of  the  debt   ....  156 

extract  from  his  message  to  third  Legislature  .            .            .  161 

"  Zavalla,"  steamship,  purchased          .....  93 

remarks  on  the  debt  due  for  it,  as  scaled           .            .            .  196 


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LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

ILLUSTRATIONS  OF  THE  HOLY  SCRIPTURES, 

In  one  super-royal  volume. 

DERIVED  PRINCIPALLY  FROM  THE  MANNERS,  CUSTOMS,  ANTIQUITIES,  TRADITIONS, 
AND  FORMS  OF  SPEECH,  RITES,  CLIMATE,  WORKS  OF  ART,  AND 

LITERATURE  OF  THE  EASTERN  NATIONS : 

EMBODYING  ALL  THAT   IS  VALUABLE  IN   THE   WORKS   OP 

ROBERTS,  HARMER,  BURDER,  PAXTOMT,  CHANDLER, 

And  the  most  celebrated  oriental  travellers.    Embracing  also  the  subject  of  the  Fulfilment  of 

Prophecy,  as  exhibited  by  Keith  and  others ;  with  descriptions  of  the  present  state 

of  countries  and  places  mentioned  in  the  Sacred  Writings. 

ILLUSTRATED  BY  NUMEROUS  LANDSCAPE  ENGRAVINGS, 

FROM     SKETCHES    TAKEN    ON    THE    SPOT. 

Edited  by  Rev.  GEORGE  Busn, 

Professor  of  Hebrew  and  Oriental  Literature  in  the  New  York  City  University. 

The  importance  of  this  work  must  be  obvious,  and,  being  altogether  illustrative,  without  reference 
to  doctrines,  or  other  points  in  which  Christians  differ,  it  is  hoped  it  will  meet  with  favour  from  all 
who  love  the  sacred  volume,  and  that  it  will  be  sufficiently  interesting  and  attractive  to  recommend 
itself,  not  only  to  professed  Christians  of  all  denominations,  but  also  to  the  general  reader.  The 
arrangement  of  the  texts  illustrated  with  the  notes,  in  the  order  of  the  chapters  and  verses  of  the 
authorized  version  of  the  Bible,  will  render  it  convenient  for  reference  to  particular  passages; 
while  the  copious  Index  at  the  end  will  at  once  enable  the  reader  to  turn  to  every  subject  discussed 
in  the  volume. 

This  volume  is  not  designed  to  take  the  plact  of  Commentaries,  but  is  a  distinct  department  of  biblical 
instruction,  and  may  be  used  at  a  companion  to  the  Comprehensive  or  any  other  Commentary,  or  the 
Holy  Bible. 

THE  ENGRAVINGS 

in  this  volume,  it  is  believed,  will  form  no  small  part  of  its  attractions.  No  pains  have  been  spared 
to  procure  such  as  should  embellish  the  work,  and,  at  the  same  time,  illustrate  the  text.  Objec 
tions  that  have  been  made  to  the  pictures  commonly  introduced  into  the  Bible,  as  being  mere  crea 
tions  of  fancy  and  the  imagination,  often  unlike  nature,  and  frequently  conveying  false  impressions, 
cannot  be  urged  against  the  pictorial  illustrations  of  this  volume.  Here  the  fine  arts  are  made 
•ubservient  to  utility,  the  landscape  views  being,  without  an  exception,  matter-of-fact  views  of  placet 
mentioned  in  Scripture,  as  they  appear  at  the  present  day ;  thus  in  many  instances  exhibiting,  in  the 
most  forcible  manner,  to  the  eye,  the  strict  and  literal  fulfilment  of  the  remarkable  prophecies ;  "  the 
present  ruined  and  desolate  condition  of  the  cities  of  Babylon,  Nineveh,  Selah,  &c.,  and  the  coun 
tries  of  Edom  and  Egypt,  are  astonishing  examples,  and  so  completely  exemplify,  in  the  most 
minute  particulars,  every  thing  which  was  foretold  of  them  in  the  height  of  their  prosperity,  that 
no  better  description  can  now  be  given  of  them  than  a  simple  quotation  from  a  chapter  and  verse 
of  the  Bible  written  nearly  two  or  three  thousand  years  ago."  The  publishers  are  enabled  to  select 
from  several  collections  lately  published  in  London,  the  proprietor  of  one  of  which  says  that  "seve 
ral  distinguished  travellers  have  afforded  him  the  use  of  nearly  Three  Hundred  Original  Sketches" 
of  Scripture  places,  made  upon  the  spot.  "The  land  of  Palestine,  it  is  well  known,  abounds  in 
scenes  of  the  most  picturesque  beauty.  Syria  comprehends  the  snowy  heights  of  Lebanon,  and  the 
majestic  ruins  of  Tadmor  and  Baalbec." 
The  above  work  can  be  had  in  various  styles  of  binding. 

Price  from  $1  50  to  $5  00. 

THE  ILLUSTRATED  CONCORDANCE, 

In  one  volume,  royal  8vo. 

A  new,  full,  and  complete  Concordance ;  illustrated  with  monumental,  traditional,  and  oriental 
engravings,  founded  on  Butterworth's,  with  Cruden's  definitions ;  forming,  it  is  believed,  on  many 
accounts,  a  more  valuable  work  than  either  Butterworth,  Cruden,  or  any  other  similar  book  in  the 
language. 

The  value  of  a  Concordance  is  now  generally  understood ;  and  those  who  have  used  one,  con- 
•ider  it  indispensable  in  connection  with  the  Bible.  Some  of  the  many  advantages  the  Illustrated 
Concordance  has  over  all  the  others,  are,  that  it  contains  near  two  hundred  appropriate  engravings  : 
it  is  printed  OB  fine  white  paper,  with  beautiful  large  type. 

Price  One  Dollar. 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 
LIPPINCOTT'S  EDITION  OF 

BAGSTER'S  COMPREHENSIVE  BIBLE, 

In  order  to  develops  the  peculiar  nature  of  the  Comprehensive  Bible,  it  will  only  be  necessarj 
to  embrace  its  more  prominent  features. 

1st.  The  SACKED  TEXT  is  that  of  the  Authorized  Version,  and  is  printed  from  the  edition  cor 
rected  and  improved  by  Dr.  Blaney,  which,  from  its  accuracy,  is  considered  the  standard  edition. 

2d.  The  VARIOUS  READINGS  are  faithfully  printed  from  the  edition  of  Dr.  Blaney,  inclusiTe 
of  the  translation  of  the  proper  names,  without  the  addition  or  diminution  of  one. 

3d.  In  the  CHRONOLOGY,  great  care  has  been  taken  to  fix  the  date  of  the  particular  transac 
tions,  which  has  seldom  been  done  with  any  degree  of  exactness  in  any  former  edition  of  the  Bible. 

4th.  The  NOTES  are  exclusively  philological  and  explanatory,  and  are  riot  tinctured  with  senti 
ments  of  any  sect  or  party.  They  are  selected  from  the  most  eminent  Biblical  critics  and  com 
mentators. 

It  is  hoped  that  this  edition  of  the  Holy  Bible  will  be  found  to  contain  the  essence  of  Biblical 
research  and  criticism,  that  lies  dispersed  through  an  immense  number  of  volumes. 

Such  is  the  nature  and  design  of  this  edition  of  the  Sacred  Volume,  which,  from  the  Tarions 
objects  it  embraces,  the  freedom  of  its  pages  from  all  sectarian  peculiarities,  and  the  beauty,  plain 
ness,  and  correctness  of  the  typography,  that  it  cannot  fail  of  proving  acceptable  and  useful  to 
Christians  of  every  denomination. 

In  addition  to  the  usual  references  to  parallel  passages,  which  are  quite  full  and  numerous,  the 
student  has  all  the  marginal  readings,  together  with  a  rich  selection  of  Philological,  Critical,  Histo 
rical,  Geographical,  and  other  valuable  notes  and  remarks,  which  explain  and  illustrate  the  sacred 
text.  Besides  the  general  introduction,  containing  valuable  essays  on  the  genuineness,  authenticity, 
and  inspiration  of  the  Holy  Scriptures,  and  other  topics  of  interest,  there  are  introductory  and  con 
cluding  remarks  to  each  book— a  table  of  the  contents  of  the  Bible,  by  which  the  different  portion* 
are  so  arranged  as  to  read  in  an  historical  order. 

Arranged  at  the  top  of  each  page  is  the  period  in  which  the  prominent  events  of  sacred  history 
took  place.  The  calculations  are  made  for  the  year  of  the  world  before  and  after  Christ,  Julian 
Period,  the  year  of  the  Olympiad,  the  year  of  the  building  of  Rome,  and  other  notations  of  time. 
At  the  close  is  inserted  a  Chronological  Index  of  the  Bible,  according  to  the  computation  of  Arch 
bishop  Ussher.  Also,  a  full  and  valuable  index  of  the  subjects  contained  in  the  Old  and  New  Testa 
ments,  with  a  careful  analysis  and  arrangement  of  texts  under  their  appropriate  subjects. 

Mr.  Greenfield,  the  editor  of  this  work,  and  for  some  time  previous  to  his  death  the  superintend 
ent  of  the  editorial  department  of  the  British  and  Foreign  Bible  Society,  was  a  most  extraordinary 
man.  In  editing  the  Comprehensive  Bible,  his  varied  and  extensive  learning  was  called  into  suc 
cessful  exercise,  and  appears  in  happy  combination  with  sincere  piety  and  a  sound  judgment.  The 
Editor  of  the  Christian  Observer,  alluding  to  this  work,  in  an  obituary  notice  of  its  author,  speaks 
of  it  as  a  work  of  "  prodigious  labour  and  research,  at  once  exhibiting  his  varied  taleuU  and  pro- 
fouud  erudition. * 


LIPPINCOTT'S  EDITION  OF 

THE  OXFORD  QUARTO  BIBLE, 

The  Publishers  have  spared  neither  care  nor  expense  in  their  edition  of  the  Bible ;  it  is  printed 
on  the  finest  white  vellum  paper,  with  large  and  beautiful  type,  and  bound  in  the  most  substantial 
and  splendid  manner,  in  the  following  styles :  Velvet,  with  richly  gilt  ornaments ;  Turkey  super 
extra,  with  gilt  clasps ;  and  in  numerous  others,  to  suit  the  taste  of  the  most  fastidious. 

OPINIONS   OP  THE   PRESS. 

"Tn  our  opinion,  the  Christian  public  generally  will  feel  under  great  obligations  to  the  publisher! 
of  this  work  for  the  beautiful  tasle,  arrangement,  and  delicate  neatness  with  which  they  have  got 
it  out.  The  intrinsic  merit  of  the  Bible  recommends  itself;  it  needs  no  tinsel  ornament  to  adorn 
its  sacred  pages.  In  this  edition  every  superfluous  ornament  has  been  avoided,  and  we  have  pre 
sented  us  a  perfectly  chaste  specimen  of  the  Bible,  without  note  or  comment.  It  appears  to  be  just 
what  is  needed  in  every  family — 'the  unsophisticated  word  of  God.' 

"The  size  is  quarto,  printed  with  beautiful  type,  on  white,  sized  vellum  paper,  of  the  finest  texture 
and  most  beautiful  surface.  The  publishers  seem  to  have  been  solicitous  to  make  a  perfectly 
unique  book,  and  they  have  accomplished  the  object  very  successfully.  We  trust  that  a  liberal 
community  will  afford  thrni  ample  remuneration  for  all  the  expense  ana  outlay  they  have  necessa- 


rily  incurred  in  its  publication.    It  is  a  standard  Bible. 
"The  publishers  are  Messrs.  Lappincott,  Gr 


phia."  —  Baptist  Record. 


ambo  &  Co.,  No.  14  North  Fourth  street,  Philadel 


"A  beautiful  quarto  edition  of  the  Bible,  by  L,  G.  &  Co.  Nothing  can  exceed  the  type  in  clear 
ness  and  beauty:  tlie  paper  is  of  the  finest  texture,  and  the  whole  execution  is  exceedingly  neat. 
No  illustrations  or  ornamental  type  are  used.  Those  who  prefer  a  Bible  executed  in  perfect  sim 
plicity,  yet  elegance  of  style,  without  adornment,  will  probably  never  find  one  more  to  their  taste." 
—  M.  Mayasint. 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS.. 
LIPPINCOTT'S  EDITIONS  OF 

THE   HOLY   BIBLE. 

SIX  DIFFERENT  SIZES, 

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much  less  price.  To  be  had  with  or  without  plates ;  the  publishers  having  supplied  themselves  with 
over  fifty  steel  engravings,  by  the  first  artists. 

Baxter's  Comprehensive  Bible, 

Royal  quarto,  containing  the  various  readings  and  marginal  notes ;  disquisitions  on  the  genuineness, 
authenticity,  and  inspiration  of  the  Holy  Scriptures;  introductory  and  concluding  remarks  to  each 
book ;  philological  and  explanatory  notes ;  table  of  contents,  arranged  in  historical  order ;  a  chro 
nological  index,  and  various  other  matter;  forming  a  suitable  book,  for  the  study  of  clergymen, 
Sabbath-school  teachers,  and  students. 

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minations,  $  15  00  to  $2.5  00. 

Tho  Oxford  Quarto  Bible, 

Without  note  or  comment,  universally  admitted  to  be  the  most  beautiful  Bible  extant. 
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with  gilt  ornaments,  $5  00  to  $10  00. 

The  Sunday-School  Teacher's  Polyglot  Bible,  with  Maps,  &c., 

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The  Oxford  18mo.,  or  Pew  Bible, 

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Agate  32mo.  Bible, 

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32mo.  Diamond  Pocket  Bible; 

The  neatest,  smallest,  and  cheapest  edition  of  the  Bible  published. 

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CONSTANTLY  ON  HAND, 

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A  Liberal  discount  made  to  Booksellers  and  Agents  by  the  Publishers. 

ENCYCLOP/EDIA  OF  RELIGIOUS  KNOWLEDGE; 

OR,  DICTIONARY  OF  THE  BIBLE,  THEOLOGY,  RELIGIOUS  BIOGRAPHY,  ALL  RELIGIONS, 

ECCLESIASTICAL  HISTORY,  AND  MISSIONS. 

Designed  as  a  complete  Book  of  Reference  on  all  Religious  Subjects,  and  Companion  to  the  Bible; 
forming  a  cheap  and  compact  Library  of  Religious  Knowledge.  Edited  by  Rev.  J.  Newton  Brown. 
Illustrated  by  wood-cuts,  maps,  and  engravings  on  copper  and  steel.  In  one  volume,  royal  8ro. 
Price,  $4  00. 

___  6 


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8vo. 

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THE  BIBLE  AND  PRAYER-BOOK, 

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The  Errors  of  Modern  Infidelity  Illustrated  and  Refuted. 

BY  S.  WE.  SCHMUCKER,  A.  1VT. 

In  one  volume,  12mo. ;  cloth.     Just  published. 

We  cannot  but  regard  this  work,  in  whatever  light  we  view  it  in  reference  to  its  design,  as  one 
of  the  most  masterly  productions  of  the  a?e,  and  fitted  to  uproot  one  of  the  most  fondly  cherished 
and  dan?erons  of  all  ancient  or  modern  errors.  God  must  bless  such  a  work,  armed  with  his  own 
truth,  and  doing  fierce  and  successful  battle  against  black  infidelity,  which  would  bring  His  Majesty 
and  Word  down  to  the  tribunal  of  human  reason,  for  condemnation  and  annihilation.—^.  Spectator. 


LIPPINCOTT,  GEAMBO  &  CO.'S  PUBLICATIONS. 

Cbrgi]  of  Jlmnun: 

CONSISTING   OF 

ANECDOTES  ILLUSTRATIVE  OF  THE  CHARACTER  OF  MINISTERS  OF  RELI 
GION  IN  THE  UNITED  STATES, 

""         BY  JOSEPH  BELCHER,   D.  D.t 
Editor  of  "The  Complete  Works  of  Andrew  Fuller,"  "Robert  Hall,"  &«. 

•  This  very  interesting  and  instructive  collection  of  pleasin?  and  solemn  remembrances  of  many 
pious  men,  illustrates  the  character  of  the  day  in  which  they  lived,  and  defines  the  men  more 
clearly  than  very  elaborate  essays."  —  Baltimore  American. 

"  We  regard  the  collection  as  highly  interesting:,  and  judiciously  made."— Presbyterian 


JOSEPHUS'S  (FLAVIUS)  WORKS, 

FAMILY    EDITION. 
BY  THE  LATE  WXXiLZAlMK  WHISTON,  A.  M. 

FROM  THE  LAST  LONDON  EDITION,  COMPLETE. 

On«  volume,  beautifully  illustrated  with  Steel  Plates,  and  the  only  readable  edition 
published  in  this  country. 

As  a  matter  of 'coarse,  every  family  in  our  country  has  a  copy  of  the  Holy  Bible ;  and  as  the  pre 
sumption  is  that  the  greater  portion  often  consult  its  p.t/res,  we  take  the  liberty  of  saying  to  all  those 
that  do,  that  the  perusal  of  the  writings  of  Josephus  will  be  found  very  interesting  and  instructive. 

All  those  who  wish  to  possess  a  beautiful  and  correct  copy  of  this  valuable  work,  would  do  well 
to  purchase  this  edition.  It  is  for  sale  at  all  the  principal  bookstores  in  the  United  States,  and  by 
country  merchants  generally  in  the  Southern  and  Western  States. 

Also,  the  above  work  in  two  volumes. 

BURDER'S  VILLAGE  SERMONS; 

Or,  101  Plain  and  Short  Discourses  on  the  Principal  Doctrines  of  the  Gospel. 

INTENDED  FOR  THE  USE  OF  FAMILIES,  SUNDAY-SCHOOLS,  OR  COMPANIES  ASSEM 
BLED  FOR  RELIGIOUS  INSTRUCTION  IN  COUNTRY  VILLAGES, 

BY  GEORGE  BURDER. 
To  which  is  added  to  each  Sermon,  a  Short  Prayer,  with  some  General  Prayers  for  Families, 

Schools,  &.c.,  at  the  end  of  the  work. 

COMPLETE    IN    ONE    VOLUME,    OCTAVO. 

These  sermons,  which  are  characterized  by  a  beautiful  simplicity,  the  entire  absence  of  contro 
versy,  and  a  true  evangelical  spirit,  have  gone  through  many  and  large  editions,  and  been  translated 
iuto  several  of  the  continental  languages.  "  They  have  also  been  the  honoured  means  not  only  of 
converting  many  individuals,  but  also  of  introducing  the  Gospel  into  districts,  and  even  into  parish 
churches,  where  before  it  was  comparatively  unknown." 
44  This  work  fully  deserves  the  immortality  it  has  attained." 

This  is  a  fine  library  edition  of  this  invaluable  work;  and  when  we  say  that  it  should  be  found  in 
the  possession  of  every  family,  we  only  reiterate  the  sentiments  and  sincere  wishes  of  all  who  take 
•  deep  interest  in  the  eternal  welfare  of  mankind. 


FAMILY  PRATERS  AND  HYMNS, 

ADAPTED  TO  FAMILY  WORSHIP, 
AND 

TABLES  FOR  THE  REGULAR  READING  OF  THE  SCRIPTURES. 

By  Rev.  S.  C.  WINCHESTER,  A.  M., 

Late  Pastor  of  the  Sixth  Presbyterian  Church,  Philadelphia ;  and  the  Presbyterian  Church  at 
Natchez,  Miss. 

One  volume,   12m o. 


LIPPINCOTT,  GBA5IBO  &  CO.'S  PUBLICATIONS. 

SPLENDID  LIBRARY  EDITIONS. 


ILLUSTRATED  STANDARD  POETS. 

ELEGANTLY  PRINTED,  ON  FINE   PAPER,  AND   UNIFORM   IN  SIZE  AND 

STVLE. 


The  following  Editions  of  Standard  British  Poets  are  illustrated  with  numerous  Steel 
Engravings,  and  may  be  had  in  all  varieties  of  binding. 

BYRON'S  WORKS. 

COMPLETE  IN  ONE  VOLUME,   OCTAVO. 

INCLUDING  ALL  HIS  SUPPRESSED  AND  ATTRIBUTED  POEMS;  WITH  SIX  BEAUTIFUL 

ENGRAVINGS. 

This  edition  has  been  carefully  compared  with  the  recent  London  edition  of  Mr.  Murray,  and 
made  complete  by  the  addition  of  more  than  fifty  pages  of  poems  heretofore  unpublished  in  Eng 
land.  Among  these  there  are  a  number  that  have  never  appeared  in  any  American  edition;  and 
the  publishers  believe  they  are  warranted  in  saying  that  this  is  the  most  complete  edition  of  Lord 
Byron'i  Poetical  Works  ever  published  in  the  United  States. 


icnl  &forks  of  Mrs. 


Complete  in  one  volume,  octavo  ;  with  seven  beautiful  Engravings. 

This  is  a  new  and  complete  edition,  with  a  splendid  engraved  likeness  of  Mrs.  Hemans,  on  steel, 
and  contains  all  the  Poems  in  the  last  London  and  American  editions.  With  a  Critical  Preface  by 
Mr.  Thatcher,  of  Boston. 

"As  no  work  in  the  English  language  can  be  commended  with  more  confidence,  it  will  argue  bad 
taste  in  a  female  in  this  country  to  be  without  a  complete  edition  of  the  writings  of  one  who  was 
an  honour  to  her  sex  and  to  humanity,  and  whose  productions,  from  first  to  last,  contain  no  syllable 
calculated  to  call  a  blush  to  the  cheek  of  modesty  and  virtue.  There  is,  moreover,  in  Mrs.  Hemans's 
poetry,  a  moral  purity  and  a  religious  feeling  which  commend  it,  in  an  especial  manner,  to  the  dis 
criminating  reader.  No  parent  or  guardian  will  be  under  the  necessity  of  imposing  restrictions 
with  regard  to  the  free  perusal  of  every  production  emanating  from  this  gifted  woman.  There 
breathes  throughout  the  whole  a  most  eminent  exemption  from  impropriety  of  thought  or  diction  ; 
and  there  is  at  times  a  pensiveness  of  tone,  a  winning  sadness  in  her  more  serious  compositions, 
which  tells  of  a  soul  which  has  been  lifted  from  the  contemplation  o[  terrestrial  things,  to  divine 
communing!  with  beings  of  a  purer  world." 

MILTON,  YOUNG,  GRAY,  BEATTIE,  AND  COLLINS'S 
POETICAL  WORKS. 

COMPLETE   IN   ONE   VOLUME,  OCTAVO. 
WITH  SIX  BEAUTIFUL  ENGRAVINGS. 

Cnmpr  unto  Cjjnmsim's  Tfrim  mii  ^nrtiral 

COMPLETE   IN   ONE   VOLUME,  OCTAVO. 

Including  two  hundred  and  fifty  Letters,  and  sundry  Poems  of  Cowper,  never  before  published  in 

this  country  ;  and  of  Thomson  a  new  and  interesting  Memoir,  and  upwards  of  twenty 

new  Poems,  for  the  first  time  printed  from  his  own  Manuscripts,  taken  from 

a  late  Edition  of  the  Aldine  Poets,  now  publishing  in  London. 
WITH  SEVEN  BEAUTIFUL  ENGRAVINGS. 

The  distinguished  Professor  Silliman,  speaking  of  this  edition,  observes  :  "  I  am  as  much  gratified 
by  the  elegance  and  fine  taste  of  your  edition,  as  by  the  noble  tribute  of  genius  and  moral  excel 
lence  which  these  delightful  authors  have  left  for  all  future  generations  ;  and  Cowper,  especially, 
is  not  less  conspicuous  as  a  true  Christian,  moralist  and  teacher,  than  as  a  poet  of  great  power  and 
exquisite  taste." 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

THE  POETICAL  Yi/ORKS  OF  ROGERS,  CAMPBELL/MONTGOMERY, 
LAMB,  AND  KIRKE  WHITE. 

COMPLETE   IN   ONB   VOLUME,    OCTAVO. 
WITH    SIX   BEAUTIFUL    ENGRAVINGS. 

The  beauty,  correctness,  and  convenience  of  this  favourite  edition  of  these  standard  authors  are 
BO  well  known,  that  it  is  scarcely  necessary  to  add  a  word  in  its  favour.  It  is  only  necessary  to  say, 
that  the  publishers  have  now  issued  an  illustrated  edition,  which  greatly  enhances  its  former  value. 
The  engravings  are  excellent  and  well  selected.  It  is  the  best  library  edition  extant 

CBABBE,  HEBEU,  AND  POLLOK'S  POETICAL  WORKS. 

COMPLETE   IN    ONE   VOLUME,  OCTAVO. 
WITH  SIX  BEAUTIFUL   ENGRAVINGS. 

A  writer  in  the  Boston  Traveller  holds  the  following  language  with  reference  to  these  valuable- 
editions  :— 

"  Mr.  Editor :  —  I  wish,  without  any  idea  of  puffing,  to  say  a  word  or  two  npon  the  '  Library  of 
English  Poets'  that  is  now  published  at  Philadelphia,  by  Lippincott,  Grambo  &  Co.  It  is  certainly, 
taking  into  consideration  the  elegant  manner  in  which  it  is  printed,  and  the  reasonable  price  at 
which  it  is  afforded  to  purchasers,  the  best  edition  of  the  modern  British  Poets  that  has  ever  been 
published  in  this  country.  Each  volume  is  an  octavo  of  about  600  pages,  double  columns,  stereo 
typed,  and  accompanied  with  fine  engravings  and  biographical  sketches ;  and  most  of  them  are 
reprinted  from  Galignani's  French  edition.  As  to  its  value,  we  need  only  mention  that  it  contains 
the  entire  works  of  Montgomery,  Gray,  Beattie,  Collins,  Byron,  Cowper,  Thomson,  Milton,  Young, 
Rogers,  Campbell,  Lamb,  Hemans,  Heber,  Kirke  White,  Crabbe,  the  Miscellaneous  Works  of  Gold 
smith,  and  other  masters  of  the  lyre.  The  publishers  are  doing  a  great  service  by  their  publication, 
and  their  volumes  are  almost  in  as  great  demand  as  the  fashionable  novels  of  the  day ;  and  they 
deserve  to  be  so :  for  they  are  certainly  printed  in  a  style  superior  to  that  in  which  we  have  before 
had  the  works  of  the  English  Poets." 

No  library  can  be  considered  complete  without  ft  copy  of  the  above  beautiful  and  cheap  editions 
of  the  English  Poets ;  and  persons  ordering  all  or  any  of  them,  will  please  say  Lippincott,  Grainbo 
&  Co.'s  illustrated  editions. 


A    COMPLETE 

Sirftnnnrtj  of  |forfiral  denotations: 

COMPRISING  THE  MOST  EXCELLENT  AND  APPROPRIATE  PASSAGES  IN 
THE  OLD  BRITISH  POETS;  WITH  CHOICE  AND  COPIOUS  SELEC 
TIONS  FROM  THE  BEST  MODERN  BRITISH  AND 

AMERICAN  POETS. 

EDITED  BTT  SARAH  JOSEPHA  HALE. 
As  nightingales  do  upon  glow-worms  feed, 
So  poets  live  upon  the  living  light 
Of  Nature  and  of  Beauty. 

BaOey't  Ftstvt. 

Beautifully  illustrated  with  Engravings.    In  one  super-royal  octavo  volume,  in  various 

bindings. 

The  publishers  extract,  from  the  many  highly  complimentary  notices  of  the  above  valuable  and 
beautiful  work,  the  following : 

"  We  have  at  last  a  volume  of  Poetical  Quotations  worthy  of  the  name.  It  contains  nearly  sir 
hundred  octavo  pases,  carefully  ami  tastefully  selected  from  all  the  home  and  foreign  authors  of 
celebrity.  It  is  invaluable  to  a  writer,  while  to  the  ordinary  reader  it  presents  every  subject  at  a 
glance."—  Godey's  Lady's  Book. 

"  The  plan  or  idea  of  Mrs.  Halo's  work  is  felicitous.  It  is  one  for  which  her  fine  taste,  her  orderly 
habits  of  mind,  and  her  lonsr  occupation  with  literature,  has  given  her  peculiar  facilities;  and  tho 
roughly  has  she  accomplished  her  task  in  the  work  before  us."  —  Sartatn's  Magazine. 

"It  is  a  choice  collection  of  poetical  extracts  from  every  English  nnd  American  author  worth 
perusing,  from  the  days  of  Chaucer  to  the  present  time."  —  Washington  Union. 

"  There  is  nothing  negative  about  this  work ;  it  is  positively  good."—  Evening  "Bulletin. 

10 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

THE  DIAMOND  EDITION  OF  BYRON, 
THE  POETICAL  WORKS  OF  LORD  BYRON, 

•WITH   A   SKETCH   OP   HIS   LIFE. 

COMPLETE   IN   ONE    NEAT   DUODECIMO   VOLUME,  WITH    STEEL    PLATES. 

The  type  of  this  edition  is  so  perfect,  and  it  is  printed  with  so  much  care,  on  fine  white  paper, 
that  it  can  be  read  with  as  much  ease  as  most  of  the  larger  editions.  This  work  is  to  be  had  La 
plain  and  superb  binding:,  making  a  beautiful  volume  for  a  gift. 

"  The  Poetical  Works  of  Lord  Byron,  complete  in  one  volume  •  published  by  L  ,  G.  &  Co.,  Phila 
delphia.  We  hazard  nothing:  in  saying  that,  take  it  altogether,  this  is  the  most  elegant  work  ever 
issued  from  the  American  press. 

" '  In  a  single  volume,  not  larger  than  an  ordinary  duodecimo,  the  publishers  have  embraced  the 
whole  of  Lord  Byron's  Poems,  usually  printed  in  ten  or  twelve  volumes;  and,  what  is  more  remark 
able,  have  done  it  with  a  type  so  clear  and  distinct,  that,  notwithstanding  its  necessarily  small  size, 
it  may  be  read  with  the  utmost  facility,  even  by  failing  eyes.  The  book  is  stereotyped  ;  and  never 
have  we  seen  a  finer  specimen  of  that  art.  Everything:  about  it  it  perfect  — the  paper,  the  print 
ing,  the  binding,  all  correspond  with  each  other ;  and  it  is  embellished  with  two  fiub  engravings, 
well  worthy  the  companionship  in  which  they  aVe  placed. 

"  'This  will  make  a  beautiful  Christmas  present. 

"  ^Ve  extract  the  above  from  Godey's  Lady's  Book.  The  notice  itself,  we  are  given  to  understand, 
is  written  by  Mrs.  Hale. 

"  We  have  to  add  our  commendation  In  favour  of  this  beautiful  volume,  a  copy  of  which  has 
been  sent  us  by  the  publishers.  The  admirers  of  the  noble  bard  will  feel  obliged  to  the  enterprise 
which  has  prompted  the  publishers  to  dare  a  competition  with  the  numerous  editions  of  his  works 
already  in  circulation ;  and  we  shall  be  surprised  if  this  convenient  travelling  edition  does  not  in  a 
great  degroe  supersede  the  use  of  the  large  octavo  works,  which  have  little  advantage  in  size  and 
openness  of  type,  and  are  much  inferior  in  the  qualities  of  portability  and  lightness."  — 


THE  DIAMOND  EDITION  OF  MOORE. 

(CORRESPONDING  WITH  BYRON.) 

THE  POETICAL  WORKS~OF  THOMAS  MOORE, 

COLLECTED  BY  HIMSELF. 

COMPLETE    IN  ONH  VOLUME. 

This  work  is  published  uniform  with  Byron,  from  the  last  London  edition,  and  is  th«  mo«t  com 
plete  printed  in  the  country. 

THE  DIAMOND  EDITION  OF  SHAKSPEARE, 

(COMPLETE  IN  ONE  VOLUME,) 
INCLUDING  A  SKETCH  OF  HIS  LIFE. 

•  UNIFORM  WITH  BYRON  AND  MOORE. 

THE   ABOVE   WORKS   CAN   BE   HAD   IN   BEVEXA.L   VARIETIES   OF   BINDIX8. 

GOLDSMITH'S  ANIMATED  NATURE. 

IN   TWO   VOLUMES,   OCTAVO. 
BEAUTIFULLY  ILLUSTRATED  WITH  385  PLATES. 

CONTAINING  A  HISTORY  OF  THE  EARTH,  ANIMALS,  BIRDS,  AND  FISHES;  FORMING 
THE  MOST  COMPLETE  NATURAL  HISTORY  EVER  PUBLISHED. 

This  is  a  work  that  should  be  in  the  library  of  every  family,  having  been  written  by  one  of  the 
most  talented  authors  in  the  English  language. 

"  Goldsmith  can  never  be  made  obsolete  while  delicate  genius,  exquisite  feeling,  fine  invention, 
the  most  harmonious  metre,  and  the  happiest  diction,  are  at  all  valued." 

BIGLAND'S  NATURAL  HISTORY 

Of  Animals,  Birds,  Fishes,  Re»Jiles,  and  Insects.    Illustrated  with  numerous  and  beautiful  Engrtr- 

ings.    By  JOHN  BrGLAND,  author  of  a  "  View  of  the  World,"  "  Letters  on 

Universal  History,"  &c.    Complete  in  1  vol.,  12mo. 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

THE  POWER  AND  PROGRESS  OF  THE  UNITED  STATES. 
THE  UNITED  STATES;  Its  Power  and  Progress. 

BY  GUILLAUME   TELL  POUSSIN, 

LATE  MINISTER  OF  THE  REPUBLIC  OF  FRANCE  TO  THE  UNITED  STATES. 

FIRST  AMERICAN,  FROM  THE  THIRD  PARIS  EDITION. 

TRANSLATED  FROM  THE  FRENCH  BY  EDMOND  L.  DU  BARRY,  M.  D, 
SURGEON  U.  S.  NAVY. 

In  one  large  octavo  volume. 


SCHOOLCRAFT'S  GREAT  NATIONAL  WORK  ON  THE  INDIAN  TRIBES  OF 
THE  UNITED  STATES, 

WITH  BEAUTIFUL  AND  ACCURATE   COLOURED  ILLUSTRATIONS. 

HISTORICAL  AND  STATISTICAL  INFORMATION 

RESPECTING   THC 

HISTORY,  CONDITION  AND  PROSPECTS 

OP  TH« 

Hnhtan<Krib*0aft|ie  ICmUh 


COLLECTED  AND  PREPARED  UNDER  THE  DIRECTION  OF  THE  BUREAU  OF  INDIAN 
AFFAIRS,  PER  ACT  OF  MARCH  3, 1S17, 

BY  HENRY  R.  SCHOOZ.CR APT,  X.Z..D. 

ILLUSTRATED  BY  S.  EASTMAN,  CAPT.  TJ.  S.  A, 
PUBLISHED  BY  AUTHORITY  OF  CONGRES8. 


THE  AMERICAN  GARDENER'S  CALENDAR, 

ADAPTED  TO  THE  CLIMATE  AND  SEASONS  OF  THE  UNITED  STATES. 

Containing  a  complete  account  of  all  the  work  necessary  to  be  done  in  the  Kitchen  Garden,  Fruit 
Garden,  Orchard,  Vineyard,  Nursery,  Plensure-Ground,  Flower  Garden,  Green-house,  Hot-house, 
and  Forcing  Frames,  for  every  month  in  the  year ;  with  ample  Practical  Directions  for  performing 
the  name. 

Also,  general  as  well  as  minute  instructions  for  laying  out  or  erecting  each  and  every  of  the  abort 
departments,  according  to  modern  taste  and  the  most  approved  plans;  the  Ornamental  Planting  of 
Pleasure  Grounds,  in  the  ancient  and  modern  style;  the  cultivation  of  Thorn  Quicks,  and  other 
plants  suitable  for  Live  Hedges,  with  the  best  methods  of  making  them,  <tc.  To  which  are  annexed 
catalogues  of  Kitchen  Garden  Plants  and  Herbs;  Aromatic,  Pot,  and  Sweet  Herbs;  Medicinal 
Plants,  and  the  most  important  Grapes,  <Vc.,  used  in  rural  economy;  with  the  soil  best  adapted  to 
their  cultivation.  Together  with  a  copious  Index  to  the  body  of  the  work. 

BY  BERNARD  M'MAHON. 
Tenth  Edition,  greatly  improved.    In  one  volume,  octavo. 


THE  PORTFOLIO  OF  A  SOUTHERN  MEDICAL  STUDENT. 

BY  GEORGE  M.  WHARTON,  M.  D. 

WITH   NUMEROUS   ILLUSTRATION^  BY  CROOME. 
One  volume,   12m o. 
___ 


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THE  FARMER'S  AND  PLANTER'S  ENCYCLOP/EDIA, 

$|R  /umw's  ntift  Chute's  (gnrtjrlnpieMa  nf  Jxttral  Affairs, 

BY  CUTHBERT  W.  JOHNSON. 
ADAPTED  TO  THE  UNITED  STATES  BY  GOUVERNEUR  EMERSON, 

Illustrated  by  seventeen  beautiful  Engravings  of  Cattle,  Horses,  Sheep,  the  varieties  of  Wheat, 
Barley,  Oats,  Grasses,  the  Weeds  of  Agriculture,  &c. ;  besides  numerous  Engrav 
ings  on  wood  of  the  most  important  implements  of  Agriculture,  <ko. 

This  standard  work  contains  the  latest  and  best  information  upon  all  subjects  connected  with 
farming,  and  appertaining  to  the  country ;  treating  of  the  great  crops  of  grain,  hay,  cotton,  hemp, 
tobacco,  rice,  sugar,  &c.  Ac. ;  of  horses  and  mules ;  of  cattle,  with  minute  particulars  relating  to 
cheese  and  butter-making;  of  fowls,  including  a  description  of  capon-making,  with  drawings  of  the 
instruments  employed;  of  bees,  and  the  Russian  and  other  systems  of  managing  bees  and  con 
structing  hives.  Long  articles  on  the  uses  and  preparation  of  bones,  lime,  guano,  and  all  sorts  of 
animal,  mineral,  and  vegetable  substances  employed  as  manures.  Descriptions  of  the  most  approved 
ploughs,  harrows,  threshers,  and  every  other  agricultural  machine  and  implement ;  of  fruit  and 
shade  trees,  forest  trees,  and  shrubs ;  of  weeds,  and  all  kinds  of  flies,  and  destructive  worms  and 
insects,  and  the  best  means  of  getting  rid  of  them ;  together  with  a  thousand  other  matters  relating 
to  rural  life,  about  which  information  is  so  constantly  desired  by  all  residents  of  the  countrj. 
IN  ONE  LARGE  OCTAVO  VOLUME. 


MASON'S  FARRIER-FARMERS'  EDITION. 

Price,  62  cents. 

THE  PRACTICAL  FARRIER,  FOR  FARMERS: 

COMPRISING    A   GENERAL   DESCRIPTION  OF  THE   NOBLE  AMD  USEFUL   ANIMAL, 

THE    HORSE; 

WITH  MODES  OF  MANAGEMENT  IN  ALL  CASES,  AND  TREATMENT  IN  DISEA&JL 
TO   WHICH   IS  ADDED, 

A  PRIZE  ESSAY  ON  MULES  •  AND  AN  APPENDIX, 

Containing  Recipes  for  Diseases  of  Horses,  Oxen,  Cows,  Calves,  Sheep,  Dogs,  Swine,  &c.  &c. 
BY  RICHARD  MASON,  M.  D., 

Formerly  of  Surry  County,  Virginia. 
In  one  volume,  12rno.;    bound  in  cloth,  gilt. 

MASON'S  FARRIER  AND  STUD-BOOK-NEW  EDITION. 


THE  GENTLEMAN'S  NEW  POCKET  FARRIER: 

COMPRISING  A  GENERAL  DESCRIPTION  OP  THE  NOBLE  AND  USEFUL  ANIMAL, 

j^v  THE    HORSE; 

WITH  MODES  OF  MANAGEMENT  IN  ALL  CASES,  AND  TREATMENT  IN  DISEASE. 

BIT  RICHARD  MASON,  M.D,, 

Formerly  of  Sarry  County,  Virginia. 

To  which  is  added,  A  PRIZE  ESSAY  ON  MULES;  and  AN  APPENDIX,  containing  Recipes  for 

Diseases  of  Horses,  Oxen,  Cows,  Calves,  Sh«ep,  Dogs,  Swine,  <Scc.  Ac. ;  with  Annals 

of  the  Turf,  American  Stud- Book,  Rules  for  Training,  Racing,  <Sto. 

WITH  A   SUPPLEMENT, 

Comprising  sn  Essay  on  Domestic  Animals,  especially  the  Horse ;  with  Remaiks  on  Treatment  and 

Breeding ;  together  with  Trotting  and  Racing  Tables,  showing  the  best  time  on  record  at  one, 

two,  three  and  four  mile  heats  ;  Pedigrees  of  Winning  Horses,  since  1839,  and  of  the  most 

celebrated  Stallions  and  Mares ;  with  useful  Calvin?  and  Lambinj  Tables.    Bj 

J.  S.  SKINNER,  Editor  now  of  the  Farmer's  Library,  New  York,  &c.  Ac. 

13 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

HINDS'S  FARRIERY  AND  STUD-BOOK-NEW  EDITION. 
FARRIERY, 

TAUGHT  ON  A  NEW  AND  EAST  PLAN: 

BEIKQ 

a  €mlm  nn  tip  Dmm  irai  Slrritofs  nf  Ijii 

With  Instructions  to  the  Shoeing  Smith,  Farrier,  and  Groom ;  preceded  by  a  Popular  Description  of 
the  Animal  Functions  in  Health,  and  how  these  are  to  be  restored  when  disordered. 

BY  JOHN    HINDS,  VETERINARY  SURGEON. 

With  considerable  Additions  and  Improvements,  particularly  adapted  to  this  country, 

BY  THOMAS  M.   SMITH, 
Veterinary  Surgeon,  and  Member  of  the  London  Veterinary  Medical  Society. 

WITH  A  SUPPLEMENT,  BY  J.  S.  SKINNER. 

The  publishers  have  received  numerous  flattering  notices  of  the  great  practical  value  of  these 
worki.  The  distinguished  editor  of  the  American  Fanner,  speaking  of  them,  observes :—"  We 
cannot  too  highly  recommend  these  books,  and  therefore  advise  every  owner  of  a  horse  to  obtain 
them."  #• 

"There  are  receipts  in  those  books  that  show  how  Founder  may  be  cured,  and  the  traveller  pur 
sue  his  journey  the  next  day,  by  giving  a  tahlespoonful  of  alum.  This  was  pot  from  Dr.  P.  Thornton, 
of  MontpeIier,Rappahannock  county,  Virginia,  as  founded  on  his  own  observation  in  several  cases. 

"The  constant  demand  for  Mason's  and  Hinds's  Farrier  has  induced  the  publishers,  Messrs.  Lip- 

Ett,  Grambo  &  Co.,  to  put  forth  new  editions,  with  a  '  Supplement'  of  100  pages,  by  J.  S.  Skinner, 
We  should  have  sought  to  render  an  acceptable  service  to  our  agricultural  readers,  by  giving 
pter  from  the  Supplement,  'On  the  Relations  between  Man  and  the  Domestic  Animals,  espe 
cially  the  Horse,  and  the  Obligations  they  impose  ;'  or  the  one  on  '  The  Form  of  Animals ;'  but  that 
either  one  of  them  would  overrun  the  space  here  allotted  to  such  subjects." 

"  Lists  of  Medicines,  and  other  articles  which  ought  to  be  at  hand  about  every  training  and  livery 
stable,  and  every  Farmer's  and  Breeder's  establishment,  will  be  found  in  these  valuable  works." 


TO  CARPENTERS  AND  MECHANICS, 

Just  Published. 


A  NEW  AND  IMPROVED  EDITION  OF 


THE  CARPENTER'S  NEW  GUIDE, 

BEING  A  COMPLETE  BOOK  OF  LINES  FOB, 

OARPEXTTRV  AND  JOIN  BUY; 

Treating  fully  on  Practical  Geometry,  Saffifs  Brick  and  Plaster  Groins,  Niches  of  every  description, 

Sky-lights,  Lines  for  Roofs  and  Domes ;  with  a  great  variety  of  Designs  for  Roofs, 

Trussed  Girders,  Floors,  Domes,  Bridges,  &c.,  Angle  Bars  for  Shop 

Fronts,  <fcc.,  and  Raking  Mouldings. 

AL  SO, 

Additional  Plans  for  various  Stair-Cases,  with  the  Lines  for  producing  the  Fnce  and  Falling  Moulds, 
never  before  published,  and  greatly  superior  to  those  given  in  a  former  edition  of  this  work. 

BY  WILLIAM  JOHNSON,  ARCHITECT, 

07   PHILADELPHIA. 

The  whole  founded  on  true  Geometrical  Principles;  the  Theory  and  Practice  well  explained  and 
fully  exemplified,  on  eighty-three  copper  plates,  including  some  Observations  and  Calculations  on 
the  Strength  of  Timber. 

BY    PETER    NICHOLSON, 

Author  of  "The  Carpenter  and  Joiner's  Assistant,"  "The  Student's  Instructor  to  the  Five 
Orders,"  <kc. 

Thirteenth  Edition.    One  volume,  4to.,  well  bound. 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

A  DICTIONARY  OF  SELECT  AND  POPULAR  QUOTATIONS, 

WHICH  ARE  IN  DAILY  USE. 
TAKEN  FROM  THE  LATIN,  FRENCH,  GREEK,  SPANISH  AND  ITALIAN  LANGUAGES. 

Together  with  a  copious  Collection  of  Law  Maxims  and  Lnw  Terms,  translated  into 
English,  with  Illustrations,  Historical  and  Idiomatic. 

NEW  AMERICAN  EDITION,  CORRECTED,  WITH  ADDITIONS. 
One  volume,    12mo. 

This  volume  comprises  a  copious  collection  of  legal  and  other  terms  which  are  in  common  use, 
with  English  translations  and  historical  illustrations ;  and  we  should  judge  its  author  had  surely 
been  to  a  great  "  Feast  of  Languages,"  and  stole  all  the  scraps.  A  work  of  this  character  should 
hare  an  extensive  sale,  as  it  entirely  obviates  a  serious  difficulty  in  which  most  readers  are  mrolved 
by  the  frequent  occurrence  of  Latin,  Greek,  and  French  passages,  which  we  suppose  are  introduced 
by  authors  for  a  mere  show  of  learning  — a  difficulty  very  perplexing  to  readers  in  general  This 
"  Dictionary  of  Quotations,"  concerning  which  too  much  cannot  be  said  in  its  favour,  effectually 
remoTes  the  difficulty,  and  gives  the  reader  an  advantage  over  the  author;  for  we  believe  a  majority 
are  themselves  ignorant  of  the  meaning  of  the  terms  they  employ.  Very  few  truly  learned  authors 
will  insult  their  readers  by  introducing  Latin  or  French  quotations  in  their  writings,  when  "plain 
English"  will  do  as  well ;  but  we  will  not  enlarge  on  this  point. 

If  the  book  is  useful  to  those  unacquainted  with  other  lanfruages,  it  is  no  less  valuable  to  the 
classically  educated  as  a  book  of  reference,  and  answers  all  the  purposes  of  a  Lexicon  —  indeed,  on 
many  accounts,  it  is  better.  It  eaves  the  trouble  of  tumbling  over  the  larger  volumes,  to  which 
every  one,  and  especially  those  engaged  in  the  legal  profession,  are  very  often  subjected.  It  should 
hare  a  place  in  every  library  in  the  country. 


RUSCHENBERGER'S  NATURAL  HISTORY, 

COMPLETE,    WITH    NEW    GLOSSARY. 


(Bbttunts  of  Ihtnral  li 


EMBRACING  ZOOLOGY,  BOTANY  AND  GEOLOGY; 

FOR  SCHOOLS,  COLLEGES  AND  FAMILIES. 

B7  W.  S.  W.  BUSCHENBSRGER,!*!.  D. 

IN   TWO   VOLUMES. 

WITH  NEARLY  ONE  THOUSAND  ILLUSTRATIONS,  AND  A   COPIOUS   GLOSSARY. 
Vol.  1.  contains  Vertebrate  Animal*.    VoL  II.  contains  Intervertebrate  Animals,  Botany,  and  Geology. 


A  Beautiful  and  Valuable  Presentation  Book. 



THE    POET'S    OFFERING. 

EDITED  BY  MRS.  HALE. 

With  a  Portrait  of  the  Editress,  a  Splendid  Illuminated  Title-Page,  and  Twelve  Beautiful  Engrav 
ings  by  Sartain.    Bound  in  rich  Turkey  Morocco,  and  Extra  Cloth,  Gilt  Edge. 
To  those  who  wish  to  make  a  present  that  will  never  lose  its  value,  this  will  be  found  the  most 
desirable  Gift-Book  ever  published. 

"  We  commend  it  to  all  who  desire  to  present  a  friend  with  a  volume  not  only  very  beautiful,  but 
of  solid  intrinsic  value."— WasMnyton  Union. 

"A  perfect  treasury  of  the  thoughts  and  fancies  of  the  best  English  and  American  Poets.  The 
paper  and  printing  are  beautiful,  and  the  binding  rich,  elegant,  and  substantial ;  the  most  sensible 
and  attractive  of  all  the  elegant  gift-books  we  have  seen.""—  Evening  Bulletin. 

*  The  publishers  deserve  the  thanks  of  the  public  for  so  happy  a  thought,  so  well  executed.  The 
engravings  are  by  the  best  artists,  and  the  other  portions  of  the  work  correspond  m  elegance."  — 
Pvbhc  Ledger. 

"  There  is  no  book  of  selections  so  diversified  and  appropriate  within  our  knowledge."— Pcnnsylv'n. 

"It  is  one  of  the  most  valuable  as  well  as  elegant  books  ever  published  in  this  country."  —  Godfy't 
Lady  s  Book. 

"  It  is  the  most  beautiful  and  the  most  useful  offering  ever  bestowed  on  the  public.  No  individual 
of  literary  last*  will  venture  to  be  without  it."—  The  City  Item. 

15 


LIPPINCOTT,  GllAMBO  &  CO.'S  PUBLICATIONS. 

THE  YOUNG  DOMINICAN; 
OR,  THE  MYSTERIES  OF  THE  INQUISITION, 

AND  OTHER  SECRET  SOCIETIES  OF  SPAIN. 
BY  M.  V.  DE  FEREAL. 

WITH  HISTORICAL  NOTES,  BY  M,  MANUEL  DE  CUENDIAS, 

TRANSLATED    FROM   THE   FRENCH. 
ILLUSTRATED  WITH  TWENTY  SPLENDID  ENGRAVINGS  BY  FRENCH  ARTISTS, 

One  volume,  octavo. 

SAY'S  POLITICAL  ECONOMY, 

A  TREATISE  ON  POLITICAL  ECONOMY; 

Or,  The  Production,  Distribution  and  Consumption  of  Wealth. 

B7  JEA1T   BAPTISTS   SAY. 

FIFTH  AMERICAN   EDITION,  WITH  ADDITIONAL  NOTES, 
BY  C.  C.   BIDDLE,   ESQ. 

In  one  volume,  octavo. 

It  would  be  beneficial  to  oar  country  if  all  those  who  are  aspiring:  to  office,  were  required  by  their 
constituent*  to  be  familiar  with  the  pages  of  Say. 

The  distinguished  biographer  of  the  author,  in  noticing  this  work,  observes :  "  Happily  for  science, 
he  commenced  that  study  which  forms  the  basis  of  his  admirable  Treatise  on  Political  Economy ;  a 
work  whioh*not  only  improved  under  his  hand  with  every  successive  edition,  but  has  been  translated 
into  roost  of  the  European  languages." 

The  Editor  of  the  North  American  Review,  speaking  of  Say,  observes,  that  •  ke  is  tha  most 
popular,  and  perhaps  the  most  able  writer  on  Political  Economy,  since  the  time  of  Smith." 

LAURENCE  STERNE'S  WORKS, 

WITH  A  LIFE  OF  THE  AUTHOR: 

WRITTEN   BT   HIMSELF. 

WITH  SEVEN  BEAUTIFUL  ILLUSTRATIONS,   ENGRAVED  BY  GILBEKT  AND  GIHON, 
FROM  DESIGNS  BY  DARLEY. 

One  volume,   octavo;   cloth,   gilt. 

To  commend  or  to  criticise  Sterne's  Works,  in  this  age  of  the  world,  would  be  all  "  wasteful  and 
extravagant  excess."  Uncle  Toby— Corporal  Trim— the  Widow— Le  Fevre— Poor  Maria— the 
Captive  — even  the  Dead  Ass,  — this  is  all  we  have  to  say  of  Stenie;  and  in  the  memory  of  these 
characters,  histories,  and  sketches,  a  thousand  follies  and  worse  than  follies  are  forgotten.  The 
volume  is  a  very  handsome  one. 

THE  MEXICAN  WAR  AND  ITS  HEROES; 

BEING 

A  COMPLETE  HISTORY  OF  THE  MEXICAN  WAE, 

EMBRACING  ALL  THE  OPERATIONS    UNDER  GENERALS   TAYLOR  AND  SCOTT. 

WITH  A  BIOGRAPHY  OF  THE  OFFICERS. 

ALSO, 

AN  ACCOUNT  OF  THE  CONQUEST  OF  CALIFORNIA  AND  NEW  MEXICO, 

Under  Gen.  Kearny,  Cols.  Doniphan  and  Fremont.    Together  with  Numerous  Anecdote*  of  the 

War,  and  Personal  Adventures  of  the  Officers.    Illustrated  with  Accurate 

Portraits,  and  other  Beautiful  Engravings. 

In  one  volume,  12mo. 
16 


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NEW  AND  COMPLETE  COOK-BOOK, 
THE  PRACTICAL  COOK-BOOK, 

CONTAINING    UPWARDS   OP 

ONE   THOUSAND   RECEIPTS, 

Consisting  of  Directions  for  Selecting,  Preparing,  and  Cooking  all  kinds  of  Meats,  Fish.  Poultry,  and 
Game;  Soups,  Broths,  Vegetables,  ami  Salads.    Also,  tor  making  all  kinds  of  Plain  and 
Fancy  Breads,  Pastes,  Puddings,  Cakes,  Creams,  Ices,  Jellies,  Preserves,  Marma 
lades,  <kc.  <kc.  <kc.    Together  with  various  Miscellaneous  Reoipes, 
and  numerous  Preparations  for  Invalids. 

BY  MRS.   BLISS. 
In   qne   volume,   12mo. 


iitj  3fimijimt ;  nr,  €\)t  fttylmm  jiiltrt 

BY   J.  B.  JONES, 

AUTHOR  OF  "WILD  WESTERN  SCENES,"  "THE  WESTERN  MERCHANT,"  &C. 

ILLUSTRATED  WITH  TEN   ENGRAVINGS. 

In  one  volume,  12mo. 

EL  PUCHERO ;  or,  A  Mixed  Dish  from  Mexico. 

EMBRACING  GENERAL  SCOTT'S  CAMPAIGN,  WITH  SKETCHES  OF  MILITARY  LIFE  IN 

FIELD  AND  CAMP;  OF  THE  CHARACTER  OF  THE  COUNTRY.  MANNERS 

AND  WAYS  OF  THE  PEOPLE,  <kc. 

BY  RICHARD  M'SHERRY,  M.  D.,  U.  S.  N., 
LATB  ACTING   SURGEON   OF  REGIMENT   or   MARINES. 

In  one  volume,  12mo. 
WITH    NUMEROUS    ILLUSTRATIONS. 

MONEY-BAGS  AND  TITLES : 

A  HIT  AT  THE  FOLLIES  OF  THE  AGE. 

TRANSLATED  FROM  THE  FRENCH  OF  JULES  SANDEAU. 

BY   LEONARD    MYERS. 

One  volume,  12mo. 

u 'Money-Bags  and  Titles'  is  quite  a  remarkable  work,  amounts  to  a  kindly  exposure  of  the  folly 
of  human  pride,  and  also  presents  at  once  the  evil  and  the  remedy.  If  good-natured  ridicule  of 
the  impostures  practised  by  a  set  of  self-styled  reformers,  who  have  nothing  to  lose,  and  to  whom 
change  must  be  gain  — if,  in  short,  a  delineation  of  the  mistaken  ideas  which  prevent,  and  the 
means  which  conduce  to  happiness,  be  traits  deserving  of  commendation, —  the  reader  will  find 
much  to  enlist  his  attention  and  win  his  approbation  in  the  pages  of  this  unpretending,  but  truly 
meritorious  publication." 

WHAT  IS  CHURCH  HISTORY? 

AVINDICATION  OF  THE  IDEA  OF  HISTORICAL  DEVELOPMENTS, 

BY  PHILIP   SCHAF. 

TRANSLATED    FROM    THE    GERMAN. 
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~TT~ 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

DODD'S  LECTURES, 
DISCOURSES  TO~YOUNG  MEN. 

ILLUSTRATED  BY  NUMEROUS  HIGHLY  INTERESTING  ANECDOTES. 

BY  WILLIAM  DODD,   LL.  D., 

CHAPLAIN    IN   ORDINARY    TO   HIS    MAJESTY    GEORGE    THE  THIRD. 

FIRST  AMERICAN  EDITION,  WITH  ENGRAVINGS. 

One  volume,  18mo. 


THE  IRIS: 

AN  ORIGINAL  SOUVENIR. 
With  Contributions  from  the  First  Writers  in  the  Country. 

EDITED   BY  PROF.   JOHN  S.   HART. 

With  Splendid  Illuminations  and  Steel  Engravings.    Bound  in  Turkey  Morocco  and  rich  Papier 

Mache  Binding. 
IN   ONE   VOLUME,    OCTAVO. 

Its  contents  are  entirely  original.  Among  the  contributors  are  names  well  known  in  the  republic 
of  letters  ;  such  as  Mr.  Boker,  Mr.  Stoddard,  Prof.  Moffat,  Edith  May,  Mrs.  Sigourney,  Caroline  May, 
Mrs.  Kinney,  Mrs.  Butler,  Mrs.  Pease,  Mrs.  Swift,  Mr.  Van  Bibber,  Rev.  Charles  T.  Brooks,  Mrs. 
Dorr,  Erastus  W.  Ellsworth,  Miss  E.  W.  Barnes,  Mrs.  Williams,  Mary  Young,  Dr.  Gardette,  Alice 
Carey,  Phebe  Carey,  Augusta  Browne,  Hamilton  Browne,  Caroline  Eustis,  Margaret  Junkin,  Maria 
J.  B.  Browne,  Miss  Starr,  Mrs.  Brotherson,  Kate  Campbell,  &c. 


OR,  HOLY  THOUGHTS  UPON  SACRED  SUBJECTS. 

BY  CLERGYMEN  OF  THE  EPISCOPAL  CHURCH. 

EDITED  BY  THOMAS  WYATT,  A.M. 

In  one  volume,  Ii2mo. 

WITH  SEVEN  BEAUTIFUL  STEEL  ENGRAVINGS. 

The  contents  of  this  work  are  chiefly  by  clergymen  of  the  Episcopal  Church.  Among  the  con 
tributors  will  be  found  the  names  of  the  Right  Rev.  Bishop  Potter,  Bishop  Hopkins,  Bishop  Smith, 
Bishop  Johns,  and  Bishop  Doane  ;  and  the  Rev.  Drs.  H.  V.  D.  Johns,  Coleman,  and  Butler;  Rev.  G. 
T.  Bedell,  M'Cabe,  Ogilsby,  <kc.  The  illustrations  are  rich  and  exquisitely  wrought  engravings  upon 
the  following  subjects  :—"  Samuel  before  Eli,"  "Peter  and  John  healing  the  Lame  Man,"  "The 
Resurrection  of  Christ,"  "  Joseph  sold  by  his  Brethren,"  "  The  Tables  of  the  Law,"  "  Christ's 
Agony  in  the  Garden,"  and  "  The  Flight  into  Egypt."  These  subjects,  with  many  others  in  prose 
and  verse,  are  ably  treated  throughout  the  work. 


HAW-HO-NOO: 

OR,  THE  RECORDS  OF  A  TOURIST. 

BY  CHARLES  LAJNTMAN, 

Author  of  "  A  Summer  in  the  Wilderness,"  &c.  In  one  volume,  12mo. 
"  In  the  present  book,  'Haw-ho-noo.'  (an  Indian  name,  by  the  way,  for  America,)  the  author  has 
gathered  up  some  of  the  relics  of  his  former  tours,  and  added  to  them  other  interesting  matter.  It 
contains  a  number  of  carefully  written  and  instructive  articles  upon  the  various  kinds  offish  in  our 
country,  whose  capture  affords  sport  for  anglers;  reminiscences  of  unique  incidents,  manners,  and 
customs  in  different  parts  of  the  country ;  and  other  articles,  narrative,  descriptive,  and  sentimental. 
In  a  supplement  are  gathered  many  curious  Indian  legends.  They  are  related  with  great  simplicity 
and  clearness,  and  will  be  of  service  hereafter  to  the  poem-makers  of  America.  Many  of  them  are 
quite  beautiful."—  National  Iniclligmcer. 

18 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

LONZ  POWERS;  Or,  The  Regulators. 
A  ROMANCE  OF  KENTUCKY. 

FOUNDED    ON    FACTS. 
BY  JA  IVIES  WEIR,   ESQ. 

IN  TWO  VOLUMES. 

The  scenes,  characters,  and  incidents  in  these  volumes  have  been  copied  from  nature,  and  from 
real  life.  They  are  represented  as  taking  place  at  that  period  in  the  history  of  Kentucky,  when 
the  Indian,  driven,  after  many  a  hard-fought  field,  from  his  favourite  hunting-ground,  was  succeeded 
by  a  rude  and  unlettered  population,  interspersed  with  organized  bands  of  desperadoes,  scarcely 
less  savage  than  the  red  men  they  had  displaced.  The  author  possesses  a  vigorous  and  graphic 
pen,  and  has  produced  a  very  interesting  romance,  which  gives  us  a  striking  portrait  of  the  times 
he  describes. 

THE  WESTERN  MERCHANT, 

A  NARRATIVE, 

Containing  useful  Instruction  for  the  Western  Man  of  Business,  who  makes  his  Purchases  in  the 
East.    Also,  Information  for  the  Eastern  Man,  whose  Customers  are  in  the  West. 
Likewise,  Hints  for  those  who  design  emigrating  to  the  West.    De 
duced  from  actual  experience. 

BY  LUKE  SHORTFIELD,  A  WESTERN  MERCHANT. 

One   volume,    12mo. 

This  is  a  new  work,  and  will  be  found  very  interesting  to  the  Country  Merchant,  <kc.  <kc. 
A  sprightly,  pleasant  book,  with  a  vast  amount  of  information  in  a  very  agreeable  shape.    Busi 
ness,  Love,  and  Religion  are  all  discussed,  and  many  proper  sentiments  expressed  in  regard  to  each. 
The  "  moral"  of  the  work  is  summed  up  in  the  following  concluding  sentences :  "  Adhere  stead 
fastly  to  your  business  ;  adhere  steadfastly  to  your  first  love ;  adhere  steadfastly  to  the  church." 


A  MANUAL  OF  POLITENESS, 

COMPRISING  THK 

PRINCIPLES  OF  ETIQUETTE  AND  RULES  OF  BEHAVIOUR 

IN  GENTEEL  SOCIETY,  FOR  PERSONS  OF  BOTH  SEXES. 

18mo.,  with  Plates. 


Book  of  Politeness. 


THE  GENTLEMAN  AND  LADY'S 
BOOK  OF  POLITENESS  AND  PROPRIETY  OF  DEPORTMENT, 

DEDICATED  TO  THE  YOUTH  OF  BOTH  SEXES. 
BY  IVEADAIKEE   CELNART. 

Translated  from  the  Sixth  Paris  Edition,  Enlarged  and  Improved. 
Fifth    American    Edition. 
One  volume,  18mo. 


THE  ANTEDILUVIANS;  Or,  The  World  Destroyed. 

A  NARRATIVE  POEM,  IN  TEN  BOOKS. 

BY  JAMES  M'HENRY,  M.D. 

One  volume,  18mo. 


LIPPINCOTT,  GRAMBO  &  CO.'S  PUBLICATIONS. 

Bennett's  (Rev.  John)  Letters  to  a  Young  Lady, 

ON  A  VARIETY  OF  SUBJECTS  CALCULATED  TO  IMPROVE  THE  HEART, 
TO  FORM  THE  MANNERS,  AND  ENLIGHTEN  THE  UNDERSTANDING. 

"  That  our  daughters  may  be  as  polished  corners  of  the  temple." 

The  publishers  sincerely  hope  (for  the  happiness  of  mankind)  that  a  copy  of  this  valuable  little 
work  will  be  found  the  companion  of  every  young  lady,  as  much  of  the  happiness  of  every  family 
depends  on  the  proper  cultivation  of  the  female  mind. 


THE  DAUGHTER'S  OWN  BOOK: 

OR,  PRACTICAL  HOTS  PROM  A  FATHER  TO  HIS  DAUGHTER. 

One  volume,  18mo. 

This  is  one  of  the  most  practical  and  truly  valuable  treatises  on  the  culture  and  discipline  of  the 
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and  price  of  the  volumes  will  bring  them  within  the  reach  of  every  family  in  the  country,  thus 
making  them  home-reading  books  for  old  and  young.  Each  individual  will,  in  consequence,  become 
familiar,  not  only  with  the  history  of  his  own  State,  but  with  that  of  the  other  States ;  thus  mutual 
interests  will  be  re-awakened,  and  old  bonds  cemented  in  a  firmer  re-union."—  Home  Gazette. 


NEW  THEMES  FOR  THE  PROTESTANT  CLERGY; 

CREEDS  WITHOUT  CHARITY,  THEOLOGY  WITHOUT  HUMANITY,  AND  PROTESTANT 
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With  Notes  by  the  Editor  on  the  Literature  of  Charity,  Population,  Pauperism,  Political 
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"The  great  question  which  the  book  discusses  is,  whether  the  Church  of  this  age  is  what  the 
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anthor  believes  not,  and,  to  our  mind,  he  has  made  out  a  strong  case.  He  thinks  there  is  abundant 
room  for  reform  at  the  present  time,  and  that  it  is  needed  almost  as  much  as  in  the  days  of  Luther. 
And  why?  Because,  in  his  own  words, '  While  one  portion  of  nominal  Christians  have  busied 
themselves  with  forms  and  ceremonies  and  observances;  with  pictures,  images,  and  processions; 
others  have  given  to  doctrines  the  supremacy,  and  have  busied  themselves  in  laying  down  the 
lines  by  which  to  enforce  human  belief— lines  of  interpretation  by  which  to  control  human  opinion 
— lines  of  discipline  and  restraint,  by  which  to  bring  human  minds  to  uniformity  of  faith  and  action. 
They  have  formed  creeds  and  catechisms ;  they  have  spread  themselves  over  the  whole  field  of  the 
sacred  writings,  and  scratched  up  all  the  surface;  they  have  gathered  all  the  straws,  and  turned 
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and  shrub ;  they  have  dwelt  with  rapture  upon  all  that  was  beautiful  and  sublime ;  but  they  have 
trampled  over  mines  of  golden  wisdom,  of  surpassing  richness  and  depth,  almost  without  a  thought, 
and  almost  without  an  effort  to  fathom  these  priceless  treasures,  much  less  to  take  possession 
of  them."' 

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THE  BLACK  DWARF  ..................................  ST.  RONAN'S  WELL. 

OLD  MORTALITY  ....................................  .'....REDGAUNTLET. 

ROB  ROY  .............................  ;  .......................  THE  BETROTHED. 

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nf  f  jje  y&mm  tf  Utalj, 

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11. 

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___ 


THI 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AUC  .1  J914 

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AFtY  LOAM 


REC'DLD 

NOV  4 


REC'D  LD 

JAN  7    1957 


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